The Wall Street Journal has an article about the EU entitled, “Currency Union Teetering, ‘Mr. Euro’ Was Forced to Act,” which is worth reading and reflecting on seriously.[2] It represents an excellent discussion of what has happened in the past. However, its conclusions are sobering and ominous:
[F]our months later, the root causes of the Greek crisis remain: There is no central authority to even coordinate national tax-and-spending policies.
In the past month, financial markets have turned their sights on Ireland and Portugal. Doubts remain over the solvency of banks on Europe’s stricken fringe. That leaves them dependent on [the European Central Bank president Jean-Claude Trichet]’s largesse, in the form of “temporary” lending facilities introduced by the ECB when the crisis first hit.
Despite Mr. Trichet’s assurances that the bond-buying program is a stop-gap, it not only continues but has also increased in recent weeks—with no end in sight.
Put succinctly, Europe is still on the brink. It is foolish to believe otherwise. The “green shoots” that have appeared recently are an “illusion” and merely a brief respite in the midst of a maelstrom, which economic historians will describe as the “Great Depression II” (or by some similar name) 20-40 years from now.
Americans and their counterparts around the world have lost faith in their governments, and rightly so[3]; and the governments have come closer to exhausting all of their viable economic options. As this becomes increasingly clear, and as governments thrash about trying to find solutions that do not exist, and as politicians continue to lie—which after all is what they are most proficient at doing—the economic tsunami will continue to take its toll and run its course worldwide during the balance of this decade.
It will get very ugly, economically, socially and politically. Barack Obama will be swept out of office in the United States, and this process has begun already. It will accelerate with November’s elections. He is caught in the twin pincers of an economy in decline that he cannot influence except negatively, and an Afghan war that cannot be won. Republicans and Independents do not support him now; and his own Democrats are deserting him.
The slippery slope out the White House door will follow, like it did for Lyndon Johnson prior to the presidential election of 1968, when the political consequences of the Vietnam war made him unelectable. Obama will return either to Chicago or Honolulu to lick his wounds and set up his presidential library, and assume an “elder statesman” role—similar to Bill Clinton—after only one term in office.
The efforts of Jean-Claude Trichet, or “Mr. Euro,” will prove similar to measures undertaken to put Humpty Dumpty back together again. Trichet is not “Superman,” and he will lack the necessary skills; and the policy options will have been exhausted. Panics may ensue in the financial markets; and the recent crises may seem like child’s play by comparison to what is coming. The “Band-Aids” that Trichet, America’s Federal Reserve Chairman Ben Bernanke and others applied will be ripped asunder as the economic tsunami continues its relentless and unforgiving advance globally.[4]
Hold on tight. It is apt to get very ugly. The euro zone will unravel, which is likely to be a relatively small but critical part of what will be happening worldwide; and financial turmoil will engulf the euro-zone nations. There will be nobody of consequence in charge economically or politically in the United States or other countries. And the human suffering and chaos will be unfathomable.[5] Throw military and national security issues into the mix, and the results may be explosive.
© 2010, Timothy D. Naegele
[1] Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He practices law in Washington, D.C. and Los Angeles with his firm, Timothy D. Naegele & Associates, which specializes in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.comand http://www.naegele.com/naegele_resume.html). He has an undergraduate degree in economics from UCLA, as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He is a member of the District of Columbia and California bars. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal. Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., http://www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com
[2] See http://www.naegele.com/documents/CurrencyUnionTeeteringMr.EuroWasForcedtoAct.pdf; see also http://online.wsj.com/article/SB10001424052748703467004575464113605731560.html?mod=WSJ_hps_MIDDLETopStories
[3] See, e.g., https://naegeleblog.wordpress.com/2010/09/24/washington-is-sick-and-the-american-people-know-it/
[4] See also https://naegeleblog.wordpress.com/2010/09/09/are-afghanistan-iraq-and-pakistan-hopeless-and-is-the-spread-of-radical-islam-inevitable-and-is-barack-obama-finished-as-americas-president/ and https://naegeleblog.wordpress.com/2010/05/16/will-the-eus-collapse-push-the-world-deeper-into-the-great-depression-ii/
[5] See also https://naegeleblog.wordpress.com/2009/12/16/the-great-depression-ii/#comment-750 and https://naegeleblog.wordpress.com/2009/12/16/the-great-depression-ii/#comment-745
Ireland, Portugal Stir European Fears
This is the title of a Wall Street Journal article, which goes on to state:
See http://www.naegele.com/documents/IrelandPortugalfuelregionalwoes.pdf
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Another fair assessment of what is going on here in the U.S., and worldwide by Timothy. You said it before, and the Wall Street Gang had better stop sipping Starbucks and heed the warning you are telling us….
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IMF Admits The West Is Stuck In Near Depression
The IMF is conservative, and is reluctant to admit that the “Great Depression II” is upon us, for fear that panics may erode economies even more—which will happen when the economic realities are realized fully around the globe. An article on this subject in UK’s Telegraph is worth reading.
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8039789/IMF-admits-that-the-West-is-stuck-in-near-depression.html
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The situation is grim – probably grimmer than generally realized, but it’s not a foregone unavoidable end that we can’t escape. In general people will try to remove themselves from the path of a speeding train.
Europe is in some ways in better shape. While several countries went too far accumulating debt and entitlements the diversity of problems among several countries will help them. Spain and Ireland and the UK participated with the US in the global excess in housing. Germany, Italy, and others did not. Spain bought into the alternative energy hype and is learning that lesson.
I was surprised at the resurgence of discredited voodoo economic myths in the US and the readiness with which Bush initially and then Obama jumped on the Keynesian stimulus bandwagon. The lesson from the Great Depression and more recently, Japan, is that spending does not itself create sustainable economic growth.
The government here in the US is – by funding Fannie and Freddie takeover of the housing markets – stopping the market prices resetting in housing thereby ensuring no real recovery can take hold. It would be better – would have better – for the government to dismantle the ‘too big to fail’ banks selling off the parts to banks that knew better and to allow prices in the markets to reset providing generous aid to displaced families to get through until recovery got underway. The $800 + billion in stimulus had little to do with the economy and everything to do with political payoffs and payments to states structured to force permanent shift to bigger government.
In any case Europe is in for some tough times ahead. And we are in the same boat with them due to the series of Basel accords regulating banking worldwide. The situation is so difficult in part because of the original Basel accord that took effect in the early 90’s. That global banking agreement was a response, in part, to the Japanese banks rampaging worldwide using cheap money generated by their 1980’s bubble working its way through Japan and spilling out globally via its banks. Basel I was designed to level the field among global banks, but in an example of unintended consequences, it also made sure that any systemic flaws in the accord would impact all the major global banks and their home country financial systems thus laying the groundwork for a series of financial crises globally and the failure eventually of the banking systems.
There were at least two major infections injected into the global system by the original Basel I and that continue into Basel III. Both are partially responsible for the current global downturn and ensure that future crises are more likely – probably inevitable.
One is that Basel decreed that sovereign debt carries zero capital cost. Private debt all carries a higher capital cost. This embedded from the early 90’s into the global financial system a bias towards more sovereign debt ensuring there would be more of it and that it would be cheaper than the natural market rate. This has many implications – none too good – but what it ensured is that all the major global banks carry more sovereign debt on their books than they would have if the rates had to be competitive with private debt.
The European central bank and authorities had a difficult choice forced upon them by Greece. They could allow Greece to default and be forced to immediately deal with the follow-on defaults of almost all of the major banks in Europe (because of the substantial sovereign Greek debt they held), or, they could bail the Greeks out and allow their banks some time to get out of way of the train speeding toward them.
The key fact is that Basel retains the bias that caused the problem to begin with.
The second is that Basel allows major global banks to calculate their own capital requirements and in particular it has a provision that allows one major bank to buy a derivative guarantee from a sibling bank to reduce its capital cost for some particular private asset/exposure. Bank A sells a guarantee to Bank B to greatly reduce its capital cost who sells one to C for its asset who in turn helps A with another. The net effect is that the total capital in the system is woefully inadequate even as every ‘i’ is dotted and every ‘t’ crossed as per Basel.
As far as Obama getting swept out of office, I believe his only hope for re-election is for the Republicans to retake at least the House. The good side to this is that Obama seems too inflexible to take advantage of that situation to triangulate as Clinton so successfully did to get re-election.
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I agree with your first paragraph. My parents lived through the Great Depression of the last century, and did not seem to be affected by it at all.
As to your second paragraph, the only country in Europe that is truly in decent shape economically is Germany, and it cannot carry the rest of Europe. Among other things, its electorate will balk politically.
I agree with your third paragraph.
I agree with your fourth paragraph, and recommend that you read the comments beneath another blog article entitled, “The Great Depression II?”
See https://naegeleblog.wordpress.com/2009/12/16/the-great-depression-ii/
There is a real argument—which I believe is sound—that the downward fall of housing prices should not have been mitigated by foreclosure relief and other factors; and that until housing prices reach their “natural” bottom, or equilibrium, there will not be any recovery in that critical sector of our economy.
Indeed, government interference with free market forces may produce negative results, rather than helping. As you know, the Great Depression of the last century did not end until the onset of World War II, despite the massive governmental programs crafted by Franklin Roosevelt’s administration.
I agree with your comments about Basel. It may well represent a “house of cards” that comes crashing down. Once one or more panics set in, I believe there is nothing that governments will be able to do to stem them. One such “bubble” that I have believed for many years exists in the U.S. relates to mutual funds. Should panics set in and investors seek to cash out of such funds, a liquidity crisis may ensue that cannot be stemmed. The risks of panics such as this one are enormous.
Finally, I agree with your last paragraph, and do not believe Obama is adroit enough to handle the situation. Indeed, the twin pincers of a collapsing economy and a failing Afghan war may overwhelm him personally and politically. Throw in other factors that we do not know about yet (e.g., terrorist attacks), and he may fall like a rock politically. More and more, Americans may conclude that he is “out of touch” and “over his head,” which might result in him being considered “irrelevant” politically and as a leader. I believe he is a “lame duck” now, or will be after the November elections.
Thank you for your thoughtful comments.
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The Chickens Are Coming Home To Roost
There is a plethora of bad news in the media, which will only get worse.
See, e.g., http://www.time.com/time/nation/article/0,8599,2024065,00.html (“Encountering Anguish and Anxiety Across America”) and http://www.bloomberg.com/news/2010-10-05/food-stamp-recipients-at-record-41-8-million-americans-in-july-u-s-says.html (“Food Stamp Recipients at Record 41.8 Million Americans”) and http://news.yahoo.com/s/afp/20101007/bs_afp/forexasiajapanus_20101007100939 (“Dollar tumbles to fresh 15-year low against yen”) and http://www.gallup.com/poll/143426/Gallup-Finds-Unemployment-September.aspx (“Gallup Finds U.S. Unemployment at 10.1%”) and http://www.cnbc.com/id/39626759 (“US Cities Face Half a Trillion Dollars of Pension Deficits”) and http://www.cnbc.com/id/39626607 (“California to Sell 24 Government Buildings”)
The American economy and other economies globally are collapsing. The “Great Depression II” is upon us, which economic historians will describe with some precision 20-40 years from now. Yes, there will be “green shoots” from time to time—as there were during the Great Depression of the last century, which only ended with the onset of World War II, not because of any governmental intervention.
See, e.g., https://naegeleblog.wordpress.com/2009/12/16/the-great-depression-ii and http://www.americanbanker.com/issues/173_212/-365185-1.html and http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html and http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele
Even Alan Greenspan—who is responsible for, and triggered the economic calamity that global economies are facing—is forecasting gloom and doom in a Financial Times article entitled, “Fear undermines America’s recovery.” He is the architect of the enormous economic “bubble” that burst globally. No longer is he revered as a “potentate.” His reputation is in tatters, and he is disgraced. Giulio Tremonti, Italy’s Minister of Economy and Finance, perhaps said it best:
That speaks volumes. However, the human suffering and economic devastation that Greenspan’s actions (and inactions) spawned are not limited to the United States, but are truly global in scope.
See http://www.ft.com/cms/s/0/4524339a-d17a-11df-96d1-00144feabdc0.html
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“Green Shoots For Housing Mowed Down”—And Become Dead Weeds
The Wall Street Journal has an article by this title about the American housing market and its effect on the U.S. economy, which states:
See http://www.naegele.com/documents/GreenShootsforHousingMowedDown.pdf
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Keynes Is Dead . . .
John Maynard Keynes was a British economist who advocated the use by governments of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. Contrariwise, Milton Friedman and other economists were pessimistic about the ability of governments to regulate the business cycle with fiscal policies.
A New York Times’ article entitled, “Europe Seen Avoiding Keynes’s Cure for Recession,” states:
See http://www.nytimes.com/2010/10/21/world/europe/21austerity.html?_r=2&hp and http://en.wikipedia.org/wiki/John_Maynard_Keynes
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Ireland’s Fate Tied to Doomed Banks
In a brilliant article with this title, the Wall Street Journal is reporting:
See http://online.wsj.com/article/SB10001424052748704506404575592360334457040.html?mod=WSJ_hp_mostpop_read; see also http://online.wsj.com/article/SB10001424052748704865704575610763484082240.html?mod=WSJ_hp_LEFTWhatsNewsCollection
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Is Europe Collapsing?
In an excellent UK Telegraph article by Ambrose Evans-Pritchard entitled, “Europe stumbles blindly towards its 1931 moment,” it is stated:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8132689/Europe-stumbles-blindly-towards-its-1931-moment.html (emphasis added); see also http://www.telegraph.co.uk/finance/economics/8135582/Contagion-hits-Portugal-as-Ireland-dithers-on-Rescue.html and http://www.guardian.co.uk/business/2010/nov/15/ireland-portugal-spain-european-debt-crisis and http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html and http://www.guardian.co.uk/business/2010/nov/15/greek-deficit-bigger-than-thought and http://online.wsj.com/article/SB10001424052748704584504575616033310586068.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsThird#articleTabs%3Darticle
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British Banks Have $225 billion Exposure To Ireland’s Economic Crisis
UK’s Telegraph is reporting:
See http://www.telegraph.co.uk/news/worldnews/europe/ireland/8141618/British-banks-have-140-billion-exposure-to-Irelands-economic-crisis.html
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Is Europe Collapsing?—Part 2—And America’s State And Local Debt Bomb
Ireland’s coalition government was thrown into turmoil, as Green Party leader John Gormley called for a general election, saying: “People feel misled and betrayed.” The Wall Street Journal is reporting:
See http://online.wsj.com/article/SB10001424052748704243904575630281642245978.html?mod=WSJ_hp_LEFTTopStories
The Journal added:
See http://blogs.wsj.com/brussels/2010/11/21/ireland-greece-numbers/; see also http://www.bloomberg.com/news/2010-11-22/ireland-seeks-european-union-rescue-as-outsized-crisis-overwhelms-nation.html
In an article entitled, “Rescue of Ireland Would Dwarf Greece’s Bailout on Cost of Shoring Up Banks,” Bloomberg is reporting:
See http://www.bloomberg.com/news/2010-11-22/rescue-of-ireland-would-dwarf-greece-s-bailout-on-cost-of-shoring-up-banks.html (emphasis added)
Thus, the bailout of either Spain or Italy would wipe out the entire 750 billion-euro European Financial Stability Facility that was set up in May.
In an article entitled, “Irish EU bailout may not stop Portugal follow-up,” Reuters is reporting:
See http://www.reuters.com/article/idUSTRE6AK2QQ20101122
In an article entitled, “In Bailouts, Spain Will Be ‘the Biggie’: Strategist,” CNBC is reporting:
See http://www.cnbc.com/id/40310940
In the United States, the state and local government fiscal mess is getting worse. The Journal is reporting:
See http://online.wsj.com/article/SB10001424052748704648604575621062239887650.html?mod=WSJ_hps_sections_opinion
In an article entitled “Euphoria or the Obama Depression?” that was published and distributed by the McClatchy Newspapers and McClatchy-Tribune News Service on April 8, 2009, I wrote:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
As we witnessed in the mid-terms elections on November 2nd, the chickens are coming home to roost. The economic tsunami continues to roll worldwide—with devastating economic and political effects, and enormous human suffering—which will not subside before the end of this decade.
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A Dangerous Bubble Is Emerging In China
This is the title of a Forbes’ article, which adds:
See http://www.forbes.com/2010/11/23/china-tudou-youkou-video-bubble-leadership-managing-rein.html?partner=daily_newsletter; see also https://naegeleblog.wordpress.com/2009/12/16/the-great-depression-ii/#comment-418 (“China’s economy will slow and possibly ‘crash’ within a year as the nation’s property bubble is set to burst”) and http://www.usatoday.com/money/world/2010-08-30-chinesebanks30_ST_N.htm (China’s banking system is showing “disturbing, U.S.-style cracks,” which may entail a full-blown crash of its real estate markets and its economy)
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The Contagion Spreads: EU Rescue Costs Start To Threaten Germany Itself
It was just a matter of time before this happened, with much much worse yet to come.
The UK’s Telegraph is reporting—in an article that is subtitled, “The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union”:
See http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8160999/EU-rescue-costs-start-to-threaten-Germany-itself.html; see also http://online.wsj.com/article/SB10001424052748704693104575638132375883318.html?mod=WSJ_hp_LEFTTopStories
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Irish Cutbacks Pile It On For “New Poor”
This is the title of a Wall Street Journal article, which adds:
This is still just the tip of an enormous iceberg; namely, the collapse of Ireland financially between now and the end of this decade, with much much worse yet to come.
See http://online.wsj.com/article/SB10001424052748704008704575638841899271092.html?mod=WSJ_hp_LEFTTopStories#articleTabs%3Darticle
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Ireland Is Collapsing, And Aer Lingus Feels It Acutely
In an article entitled, “Flying Through a Storm,” the Wall Street Journal is reporting:
See http://www.naegele.com/documents/FlyingThroughaStorm.pdf
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AMERICA TO BAILOUT EUROPE!
This is a potentially-tragic mistake, which simply underscores the fact that the “Great Depression II” continues to wreak havoc around the world, with no end in sight; and that governments are flailing about, trying to fashion solutions that do not exist. In the process, the human suffering will be historically staggering, rivaling the Great Depression of the last century, or worse.
In an article entitled, “US Ready to Back Bigger EU Stability Fund: Official,” Reuters is reporting:
See http://www.cnbc.com/id/40454469; see also http://www.dailymail.co.uk/news/article-1334871/Is-U-S-set-dragged-Europes-financial-troubles-Euro-soars-amid-claims-America-support-IMF-bailout.html
Europe is collapsing. America’s financial aid would not be happening unless policy makers were panicking. However, if Germany does not want to bail out its neighbors, why should the United States do so, directly or indirectly?
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When Spain goes down sometime this year Europe and the world will experience a Lehman/AIG type panic/collapse scenario that will make 08′ look like disneyland.
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Thank you, Paul, for your comment.
Yes, I agree with you. Greece, followed by Ireland, Portugal, Spain, Italy, and other European countries. It is apt to get very ugly, as you have pointed out.
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American Exceptionalism Endures, But . . .
In a thought-provoking article by U.S. News & World Report’s Mort Zuckerman entitled, “The Danger of a Global Double Dip Recession Is Real,” he writes:
See http://politics.usnews.com/opinion/mzuckerman/articles/2010/11/29/the-danger-of-a-global-double-dip-recession-is-real.html
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European Banks Took Big Slice Of Fed Aid
The Financial Times is reporting:
See http://www.ft.com/cms/s/0/4dd95e42-fd6d-11df-a049-00144feab49a.html#axzz16ueqE7wY; see also http://news.yahoo.com/s/ap/20101201/ap_on_bi_ge/us_fed_crisis_lending and http://www.ft.com/cms/s/0/8a5e3ac4-fd89-11df-a049-00144feab49a.html#axzz16ujNXHeX and http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8175432/UK-banks-borrowed-more-than-640bn-from-US-Federal-Reserve.html (“British banks represented more than a third—about $1.5 trillion—of the $3,300bn lent by the US authorities to prop up the financial sector“)
This is outrageous. Bernie Sanders is correct: the Federal Reserve has become the central bank of the world. However, most importantly, it is a precursor of the future, as the economic tsunami—or the “Great Depression II”—continues to roll worldwide, with devastating effects and unfathomable human suffering.
The worst is yet to come, and American taxpayers will be on the hook, while many are suffering greatly and unemployment and other benefits are being terminated!
See also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1023
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California On The Brink
The UK’s Economist has an article entitled, “The tide begins to turn”—and subtitled, “For once, California’s prospects seem better in the long term than in the short”—which is pure poppycock. The article is worth reading to see how out of touch some people are with respect to the economic realities that are sweeping the world, and will prevail at least through the balance of this decade.
See http://www.economist.com/node/17631115?story_id=17631115
First, I live in Southern California part of the year, where I was born and raised before working nonstop in Washington, D.C. for 21 years. I love the state; however, California’s prospects have not gotten better at all, and its long-term prognosis is even more dire. The state has diversity, great weather and natural beauty, which are perhaps unsurpassed anywhere else in the world. Yet, its parks, libraries, schools and other governmental facilities may be closed; law enforcement may undergo substantial cutbacks; state prisons may have to release significant numbers of inmates, as the Economist points out; and crime may skyrocket.
Second, the Democrats have driven the state into the ground, economically; and at its most crucial moment, they are in charge once again—like putting alcoholics in charge of running the local bar (or pub). Also, they are like Salmon trying to swim upstream, against a strong tide of anti-Obama and anti-Democrat sentiment nationally that was evident in the mid-term elections last month. Independents—of which I am one, and have been for more than 20 years, after having been a Democrat and then a Republican—joined with “disenchanted” Democrats and members of the Tea Party movement nationally to reject Barack Obama and his Democrats resoundingly.
Third, because California is bankrupt, and there is no way that its Democrats—who are responsible for the state’s problems—can sober up all of a sudden, and get “newfound religion,” they will turn to the federal government in Washington to bail them out. However, having worked on and with Capitol Hill for many years, the anti-California sentiment is strong even under the most positive economic conditions, which certainly do not exist today. The country as a whole is hurting, and this will be true for the balance of this decade; and the Republicans who control the House of Representatives are not going to bail out California and its Democrats. They will be made to suffer, at the very moment when the state is hurting most. They will pay dearly for their unbridled Liberalism, which is out of step with the rest of the nation.
Fourth, Barack Obama cannot help California, because any “big-dollar” rescue plans that the state truly needs will be blocked in Congress. Also, he is trying to save his own hide, at a time when we are witnessing his end politically. He will not be reelected in 2012, but he will do everything that he can between now and then in a desperate albeit futile effort to change that result. Helping California while the rest of the nation suffers is not in his best interests, nor does such help bode well for his long-term political survival; however, he may have to try to produce such aid, to keep California’s voters and electoral votes clearly in his column. While the fact that California bucked the national trend and elected Democrats to its statewide offices may be gratifying to him, it does not help him politically with the rest of the country. California is considered to be “la la land” to many Americans and members of Congress, and a land of nonstop “wackos” and “loonies,” and the mid-term election results simply reinforced such impressions.
Fifth, California does not have time to get its economic house in order. Time is not a friend of a state that is effectively on “life support.” Also, all of the political “fairness” reforms that theoretically might be become possible or present in the future—according to the Economist—will not make a tinker’s damn to a state economy that is bankrupt now and in the foreseeable future (e.g., during the balance of this decade). Indeed, economically, they are akin to rearranging deck chairs on the Titanic. With no realistic political or economic possibility of turning back the clock on the damage done to the state by the Democrats in the past, and essentially no chance that the congressional Republicans will bail out the state, the most dire predictions for the rest of this decade are likely to realized in California.
Hold on tight. It is apt to get very ugly for the state, Obama and his Democrats. The chickens are coming home to roost, which is happening in Europe too.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/
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I value your blogs…sometimes a lonely voice I am sure…so I just wanted to send an encouragement email… As we used to say in the 70’s “Keep on truckin’!”
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Thanks so much for your comments, Rod. I really appreciate them. 🙂
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Prince Charles And His Wife Are Attacked
Tragically, chaos and violence are descending on the UK and elsewhere in the world, and this terrifying car attack is merely the tip of an enormous iceberg, which will become all too visible during the balance of this decade. Protesters kicked and splashed paint on a car containing Prince Charles, the heir to the British throne, and his wife Camilla, Duchess of Cornwall, although the couple were unhurt.
See http://www.thisislondon.co.uk/standard/article-23905622-student-protest-mob-attacks-charles-and-camilla-on-fees-riot.do and http://www.dailymail.co.uk/news/article-1337088/TUITION-FEES-VOTE-PROTEST-Charles-Camillas-car-attacked-thousands-students-descend-Parliament.html (“Terrifying moment Charles and Camilla were surrounded by a baying mob and their car attacked in tuition fees riot. . . . In the worst royal security breach for a generation, the car carrying [Camilla] and Prince Charles was kicked, rocked and hit with paint bombs . . . , raising echoes of the 1974 kidnap attempt on Princess Anne“) and http://www.dailymail.co.uk/tvshowbiz/article-1337322/Red-hot-Kylie-greets-Prince-Charles-big-smile-The-Palladium-terrifying-car-attack-way-Royal-Variety-Show.html and http://www.dailymail.co.uk/news/article-1337351/CHARLES-AND-CAMILLA-ATTACK-How-did-close.html; see also http://www.economist.com/node/17677746 (“A more divided world economy could make 2011 a year of damaging shocks“)
The UK’s Economist has an article about the riots in London and the attack on Prince Charles and Camilla, which is worth reading and states in part:
See http://www.economist.com/blogs/bagehot/2010/12/angry_britain&fsrc=nwl
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U.S. Home Values To Drop By $1.7 Trillion This Year
As the “Great Depression II” continues to take its toll during the balance of this decade, Bloomberg is reporting:
See http://www.bloomberg.com/news/2010-12-09/homes-in-u-s-poised-to-lose-1-7-trillion-in-value-this-year-zillow-says.html
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EGADS ! I’m pretty up on what’s happening, but these numbers are astounding ! It makes me wonder if we can survive when people like Pelosi, Harry Reid, Obama and others in that “gang” are still in office.
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The Fed Must Not Be The “World’s Banker”
The Wall Street Journal has an article entitled, “Germany Vows Defense of Euro,” which is worth reading, and states in part:
See http://online.wsj.com/article/SB10001424052748703727804576011553442147030.html?mod=WSJ_hp_LEFTWhatsNewsCollection#articleTabs%3Darticle
If Germany wants to defend the euro, and its people support the use of their resources for that purpose, then so be it. However, America should not waste its resources doing so, directly or indirectly (e.g., through contributions to the IMF). There are enough problems domestically that we should not be bailing out Europe. Indeed, it was a travesty that the Fed bailed out so many European banks. Presumably they have paid back every cent by now.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1029
Ron Paul will be chairman of the Domestic Monetary Policy Subcommittee of the House Financial Services Committee in the 112th Congress, and will oversee the Fed. Hopefully he and other members of the new Congress will look into these issues, and insure that the Fed does not become the “world’s banker,” thereby having the American people become guarantors of Europe or the world’s finances.
The balance of this decade will see mass upheaval globally—politically, economically, socially, militarily, and in a host of other ways. While the United States cannot become an “island,” the American people will hold their elected and appointed officials accountable and responsible to insure that their interests are protected fully at all times, period. Things may get very ugly around the world, and they will demand nothing less. The mid-term elections of 2010 were a precursor of that, with much more to come.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/
. . .
Lastly, for those who would argue that the Fed’s actions were necessary and appropriate during the recent financial crises, my response is the following:
We know that European and other banks had huge exposures to American asset-backed securities, and still do. We know too that they needed financing to sustain their positions; and that by obtaining such financing from the Fed, sharper declines in the prices of such securities were averted.
However, the questions today—and when the new Congress assembles, and its committees begin their work—include, but are not limited to whether such financing continues, and the extent of it; whether adequate collateral was obtained and still exists; what exposure the Fed had and still has (e.g., have all extensions of credit been fully repaid, and if not why not, and what entities owe the monies and how much is owed by each, and when repayment in full can be expected).; and what exposure American taxpayers have today, and will have in future crises of this nature?
Rest assured future financial and other crises will come. It is simply a function of time.
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The Lunacy Of The Global Warming Hoax Is In Full Swing [UPDATED]
The UK’s Telegraph has a wonderful article about the “Global Warming” hoax, which discusses the Cancun Climate Change Conference’s plans to cut carbon emissions. Among other things, it states:
See http://www.telegraph.co.uk/earth/environment/climatechange/8196634/Cancun-Climate-Change-Conference-agrees-plan-to-cut-carbon-emissions.html; see also http://online.wsj.com/article/SB10001424052970204301404577171531838421366.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond (“[T]he highest benefit-to-cost ratio is achieved for a policy that allows 50 more years of economic growth unimpeded by greenhouse gas controls”)
One wag concluded—after noting that “the £2.9 billion the [UK] Government will save by increasing tuition fees [and sparking riots in London] matches the amount earmarked for [the] global warming project [of funding windmills in Africa]” (see http://www.telegraph.co.uk/comment/columnists/christopherbooker/8196410/Student-fee-savings-will-fund-windmills-in-Africa.html)—“There is a revolution coming.” Indeed.
Like the “Tooth Fairy” and the “Loch Ness Monster”—and any potency on the part of the hapless UN—the myth of man-made “Global Warming” ranks as one of the great myths of recorded history.
It is only fitting that the countries would gather “at a luxury resort” in Cancun, before they seek to “rape” the world economically. Surely, the battle cry emanating from that seaside resort to the peoples of the world is the one commonly attributed to Marie Antoinette: “Let them eat cake.”
Fortunately, for Americans, the incoming Republicans in Congress will seek to block such nonsense from ever seeing the light of day. Also, with Barack Obama’s presidency sinking into the setting sun, it is doubtful he can do much to change that result. Most importantly for him, he is trying to save his own political hide, which seems beyond redemption.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ and https://naegeleblog.wordpress.com/2010/01/01/barack-obama-america’s-second-emperor/ (see also the comments posted beneath the article)
. . .
As if they were twin omens regarding the “Global Warming” hoax, (1) Cancun was hosting the U.N. climate conference as the temperature plunged to a 100-year record low (see, e.g., http://theweek.com/article/index/210181/irony-alert-the-unusually-chilly-global-warming-summit); and (2) Barack Obama was in Copenhagen accepting a deal without any teeth to address “Global Warming,” in the midst of a blizzard that dumped snow on the Danish capital, and he was met by a blizzard in Washington, D.C. on his return from Denmark (see, e.g., https://naegeleblog.wordpress.com/2010/01/01/barack-obama-america%E2%80%99s-second-emperor/).
. . .
Next, in the United States, arctic air has arrived over the eastern half of the country, and low-temperature records will be broken before it leaves.
See, e.g., http://wattsupwiththat.com/2010/12/30/noaa-on-miami-florida-coldest-december-on-record/ (Coldest December Ever Recorded In Miami, Ft. Lauderdale, Palm Beach, Naples . . .) and http://www.weather.com/outlook/weather-news/news/articles/record-lows-southeast-florida_2010-12-13 and http://www.breitbart.com/article.php?id=D9KBLRDG0&show_article=1 (Columbia, South Carolina has first Christmas snow since records kept in 1887) and http://www.breitbart.tv/atlantas-first-white-christmas-since-1862/ (“Atlanta’s first white Christmas since the Chester Arthur administration [in 1882]“) and http://www.dailymail.co.uk/news/article-1346399/New-York-snow-More-2-000-flights-cancelled-East-Coast.html (“Snow on the ground on 49 of the 50 states as New York shivers through its THIRD storm of the winter“) and http://www.dailymail.co.uk/news/article-1346499/U-S-snow-storms-90-000-plane-passengers-face-delays.html (“90,000 passengers face grounded flights and hours of delays after ‘weather bomb’ hits U.S.“) and http://www.accuweather.com/blogs/news/story/44999/snowstorm-shatters-new-york-ci.asp (“Snowstorm Shatters New York City, Philadelphia Records“) and http://www.dailymail.co.uk/news/article-1351009/New-York-snow-Obama-trapped-traffic-storm-battered-East-Coast.html (“New York suffers the snowiest January in its history“) and http://newsminer.com/view/full_story/17324885/article-Temperatures-fall-to-50-below-in-Fairbanks–small-air-carriers-cancel-flights?instance=home_news_window_left_top_1 (“Temperatures fall to 50 below in Fairbanks; small air carriers cancel flights“) and http://www.dailymail.co.uk/sciencetech/article-2093264/Forget-global-warming–Cycle-25-need-worry-NASA-scientists-right-Thames-freezing-again.html (“Forget global warming. . . . [N]ew figures . . . show no warming in 15 years“) and http://www.climatedepot.com/a/18726/Fmr-Thatcher-advisor-Lord-Monckton-evicted-from-UN-climate-summit-after-challenging-global-warming–Escorted-from-the-hall-and-security-officers-stripped-him-of-his-UN-credentials (The Eco-Nazis Strike Again: “Fmr. Thatcher advisor Lord Monckton evicted from UN climate summit after challenging global warming—’Escorted from the hall and security officers stripped him of his UN credentials'”) and http://www.alaskadispatch.com/article/forget-global-warming-alaska-headed-ice-age (“Forget global warming, Alaska is headed for an ice age“) and http://www.mrc.org/articles/jersey-news-outlet-cries-global-warming-blizzard-approaches (“Jersey News Outlet Cries ‘Global Warming’ as Blizzard Approaches“)
Also, other parts the world are being hit hard too.
See, e.g., http://www.smh.com.au/environment/weather/theres-a-mini-ice-age-coming-says-man-who-beats-weather-experts-20101221-1945a.html (“There’s a mini ice age coming, says man who beats weather experts“) and http://www.dailymail.co.uk/news/article-1339149/Big-freeze-Coldest-December-100-years-brings-travel-chaos-holiday-rush-begins.html (“Coldest December since records began [in 1910] . . . across Britain“); see also http://www.dailymail.co.uk/sciencetech/article-1340436/Why-cold-warm-Greenland-Diverted-jet-stream-letting-icy-blast-Arctic.html (“How a freak diversion of the jet stream is paralysing the globe with freezing conditions”) and http://news.xinhuanet.com/english2010/world/2010-12/29/c_13668400.htm (“Berlin sees most snow in December since 1900s“) and http://www.dailystar.co.uk/news/view/169577/Winter-may-be-coldest-in-1000-years/ (“[UK] Winter May Be Coldest In 1000 Years“) and http://www.telegraph.co.uk/topics/weather/9710681/Britain-prepares-for-ice-and-snow-in-cold-snap.html (“Britain prepares for ice and snow . . . [and is] gearing up for what could be Britain’s coldest winter in 100 years“) and http://hosted.ap.org/dynamic/stories/A/AS_CHINA_COLDEST_WINTER?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-05-07-52-05 (“CHINA’S COLDEST WINTER IN DECADES AT NEW LOW“) and http://www.telegraph.co.uk/topics/weather/9950516/Worst-March-snow-for-30-years-brings-chaos.html (Britain: “Worst March snow for 30 years brings chaos”)
. . .
The very idea that monies should be provided to help China and India switch to renewable energy sources, including wind and solar power, is among the greatest lunacies of all. Two of the real tigers of world economic development now and in the future need such “help” about as much as Barack Obama needs more help in having his narcissistic ego stroked!
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-2315 (“Will Obama ‘Unravel’ Like Nixon Did?”); see also http://www.washingtontimes.com/news/2013/feb/4/goodbye-prius-japan-carmakers-drop-electric-car-de/ (Screw the eco-Nazis: “Goodbye, Prius? Japanese carmakers drop battery electric-car development”) and http://www.telegraph.co.uk/earth/environment/globalwarming/9919121/Look-at-the-graph-to-see-the-evidence-of-global-warming.html (“[UK’s] Met Office data show only a tiny change in world temperatures”—”The actual changes look relatively so small, compared with those rises and falls of several whole degrees the world survived in the past, that any idea that we are facing catastrophic warming pales into insignificance. . . . The price we are all increasingly having to pay for [our politicians’] gullibility is incalculable”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2517 (“The Great Green Con—”Global Warming” Is A Myth“) and http://www.telegraph.co.uk/earth/environment/climatechange/10086694/Tim-Yeo-humans-may-not-be-to-blame-for-global-warming.html (“[H]umans may not be to blame for global warming”) and http://www.climatedepot.com/2013/09/14/earth-gains-a-record-amount-of-sea-ice-in-2013-earth-has-gained-19000-manhattans-of-sea-ice-since-this-date-last-year-the-largest-increase-on-record/ (“Earth Gains A Record Amount Of Sea Ice In 2013 — ‘Earth has gained 19,000 Manhattans of sea ice since this date last year, the largest increase on record’“) and http://blogs.telegraph.co.uk/news/jamesdelingpole/100238047/global-warming-believers-are-feeling-the-heat/ (“Global warming believers are feeling the heat”—”[T]hose many alarmists whose careers depend on talking up the threat . . . [are not] winning the war to persuade the world of the case for catastrophic anthropogenic climate change [] but that the battle is all but lost”)
. . .
It is wonderful news that those who have preached “The Global Warming Hoax,” and “The Great Green Con” are and will be getting hurt. Bravo. Fraudsters deserve nothing less!
Perhaps they can shift to the “Flat Earth Society” and have better luck there.
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Low Rates Fail To Rescue Indebted Britain, The Eurozone Is In Need Of An Undertaker, The Euro Has One-In-Five Chances Of Survival, Market Alarm As US Fails To Control Biggest Debt In History, And China’s Property Bubble Has Grown So Huge That 85 Percent of Chinese Living In Cities Cannot Afford A Home
These and other sobering headlines appear in articles around the world. The chickens are coming home to roost, bigtime. Hold on tight. As I have mentioned repeatedly, things will get very ugly worldwide—politically, economically, socially, militarily, and in a host of other ways—during the balance of this decade, which will see mass upheavals globally.
See http://www.telegraph.co.uk/finance/economics/8197806/Low-interest-rates-failing-to-rescue-British-households-from-1.45-trillion-debts-says-Bank-of-England.html and http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8197780/The-eurozone-is-in-bad-need-of-an-undertaker.html and http://www.telegraph.co.uk/finance/economics/8197655/Euro-has-one-in-five-chance-of-survival-warns-CEBR.html and http://www.telegraph.co.uk/finance/comment/liamhalligan/8196283/Market-alarm-as-US-fails-to-control-biggest-debt-in-history.html and http://www.telegraph.co.uk/finance/china-business/8195879/85pc-of-urban-Chinese-cannot-afford-to-buy-a-home-as-inflation-accelerates.html
As noted in the posting directly above, one wag has concluded: “There is a revolution coming.” This is not beyond the pale!
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Europe Will Be Broken By Crises
This is a conclusion—or verdict—reached in a Wall Street Journal article by Bret Stephens entitled, “Europe Needs a Tea Party,” which is worth reading. In it, he adds:
See http://www.naegele.com/documents/Stephens-EuropeNeedsaTeaParty-WSJ.com.pdf (emphasis added)
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The Great Depression II
Despite the “green shoots”—or promising economic news, which seems to be present on both sides of the Atlantic and elsewhere in the world—one must never forget that the same thing occurred during the Great Depression of the last century too. Yet, we did not emerge from that depression until the onset of World War II.
Vernon L. Smith, Nobel Laureate in Economics, and Steven Gjerstad wrote last year in the Wall Street Journal:
See http://online.wsj.com/article/SB123897612802791281.html
These words were sobering then, and they are sobering now. Indeed, the predictions that I made last year have been coming true as well:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html; see also http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele
What happened in last month’s mid-term elections in the United States is just the beginning, with much more to come.
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The Ghost Towns Of China
The UK’s Daily Mail is reporting:
See http://www.dailymail.co.uk/news/article-1339536/The-ghost-towns-China-Amazing-satellite-images-cities-meant-home-millions-lying-completely-deserted.html
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With The Collapse Of Its Economy, The Celtic Tiger’s Property Empire Unravels
The UK’s Telegraph is reporting:
See http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8211753/Irelands-UK-property-empire-unwinds-as-it-sells-London-assets.html
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China Ready To Bail Out The EU?
In an article entitled, “Fresh humiliation for eurozone as China says it will bail out debt-ridden nations,” the UK’s Daily Mail has reported:
See http://www.dailymail.co.uk/news/article-1341110/Fresh-humiliation-euro-zone-China-says-bail-debt-ridden-nations.html and http://news.smh.com.au/breaking-news-world/china-backs-spain-to-emerge-from-crisis-beijing-20110103-19dys.html (“Beijing will buy Spanish public debt“)
. . .
In an article insert, the Daily Mail added:
See id.; see also https://naegeleblog.wordpress.com/2010/02/09/russias-putin-is-a-killer/#comment-1188
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2011: The World Will Be Grimmer
This is the judgment of Gideon Rachman, chief foreign-affairs commentator of the UK’s Financial Times, in an article that he has written for the UK’s Economist, which is worth reading:
See http://www.economist.com/node/17493390
What Rachman does not acknowledge is that the world is in the throes of the “Great Depression II” already, which economic historians will describe as such—or by using similar terms—20-40 years from now. Yes, there are “green shoots” of economic recovery, but those too will fade and become “dead weeds,” just as they did during the Great Depression of the last century. The very factors that Rachman describes will contribute to this process, and accelerate its progress. One must remember that the last Great Depression did not end until the onset of World War II; and no amount of government intervention changed that result.
What Rachman does not mention are other factors that possibly may be even more ominous, such as a shooting war on the Korean Peninsula (see, e.g., https://naegeleblog.wordpress.com/2010/12/22/the-next-major-war-korea-again); a war between Israel and Iran or its surrogates; Barack Obama’s deteriorating Afghan war, and the effects it will likely have on the American psyche, which may be reminiscent of the Vietnam war and its consequences; and the list goes on and on—with respect to possible “shocks.”
What is certain is that 2011 will hold surprises that none of us can predict. Hold on tight. Things will get very ugly during the balance of this decade.
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California’s Cuts Will Be Dramatic
The Los Angeles Times has an article about incoming-Governor Jerry Brown’s budget plans for the state, which are likely to be draconian but necessary. Having advised his administration with respect to banking matters the last time he was the state’s governor, I am not surprised that austerity measures will be implemented.
There are likely to be massive cuts in governmental services that Californians have taken for granted, such as libraries, parks, education, law enforcement and prisons, with commensurate increases in crime and an overall deterioration in the quality of many lives.
The Times’ article entitled, “Jerry Brown plays hardball on state budget”—and subtitled, “His plan will confront both parties, with calls for tax extensions and deep program cuts”—is worth reading. There are few people who know more about California’s government than Jerry Brown.
See http://www.latimes.com/news/local/la-me-budget-20101229,0,6267084.story
As the economic decline continues globally, nationally and in California during the balance of this decade, Jerry Brown is correct in doing what this article indicates. There can be no “sacred cows” in terms of budget cutting.
For example, as higher education shifts more and more to the Internet, and the Middle Class is priced out of extravagant college educations for their children, changes are automatic. Bricks-and-mortar spending is a thing of the past, especially when classes can be recorded and shown again and again on YouTube; and virtual universities become the new “norm” in terms of education.
Indeed, one can walk through the lovely college campuses of today and look at dinosaurs. Like newspapers, they are relics of a bygone era. Economics alone dictates this result. Romanticism has no place in budget planning.
Once all of the fat is wrung out of state spending that is possible, the new governor’s only viable option will be to seek help from Washington. Other states and government entities will be doing the same; and the line will be long. Yes, California will be met with resistance and even hostility by the new Republican House, because of California’s Democrat base, Democrat-controlled legislature, Democrat governor, and Democrat senators, but there is no other choice.
Hold on tight. Things will get very ugly.
See also http://lamesa.patch.com/articles/there-outta-be-a-law-californians-getting-725-new-ones-in-2011 (“Californians Getting 725 New [Laws] in 2011”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1074 (“California On The Brink“)
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Obama Vacations In Hawaii While Much Of The Nation Suffers—And Has The Gall To Advocate “Global Warming” Curbs!
Barack Obama vacations in Hawaii, while much of the United States is suffering from freezing temperatures and massive, unprecedented snows. Or as Michelle Obama has said, paraphrasing her: “Let them eat cake!”
See http://washingtonexaminer.com/blogs/beltway-confidential/2010/12/president-and-family-multi-million-dollar-christmas-vacation-hawa and http://www.breitbart.com/article.php?id=CNG.894f9613dde7faf0e564d8d311b3922e.131&show_article=1 and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1172 and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1127
Indeed, Obama’s White House plans to push “Global Warming” policies, despite the fact that “Global Warming” is a fraud and a hoax.
It has been reported, from Honolulu:
See http://www.foxnews.com/politics/2010/12/28/white-house-plans-push-global-warming-policy-gop-vows-fight/
We can all remember how much of a fight the inept Republicans put up during the 2010 lame-duck session of Congress, when Obama and his Democrats rolled them!
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The World At War
Foreign Policy has a piece entitled, “Next Year’s Wars”—and subtitled, “The 16 brewing conflicts to watch for in 2011″—which is worth noting. However, it does not include a possible war on the Korean Peninsula, which might prove catastrophic.
See http://www.foreignpolicy.com/articles/2010/12/28/next_years_wars?page=full and https://naegeleblog.wordpress.com/2010/12/22/the-next-major-war-korea-again/
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The Current Financial Crisis Is The Second Great Depression
These are the words of American political pundit Ann Coulter in an article entitled, “Investigate This!”—which is worth reading.
Coulter adds:
See http://www.humanevents.com/article.php?id=41005
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What Remains Of An Undergraduate Degree In Economics
As indicated above and elsewhere in my writings, I believe:
Having read this, a Wall Street Journal contributor brought words by economist Joan Robinson to my attention, which are wise and worthwhile repeating:
See, e.g., http://en.wikiquote.org/wiki/Joan_Robinson; see also http://en.wikipedia.org/wiki/Joan_Robinson
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China On “Collision Course” With USA
In an important article about China—which is subtitled, “We all learned at school how the status quo powers mismanaged the spectacular rise of Germany before World War I, a strategic revolution so like the rise of China today”—the UK Telegraph’s Ambrose Evans-Pritchard has written:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8277143/Appeasement-is-the-proper-policy-towards-Confucian-China.html (emphasis added)
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Bank of England Governor Warns: Standard Of Living To Plunge At Fastest Rate Since 1920s
As reported in the UK’s Telegraph, Bank of England chief Mervyn King warns that households face the most dramatic squeeze in living standards since the 1920s:
See http://www.telegraph.co.uk/finance/economics/8282354/Bank-of-England-chief-Mervyn-King-standard-of-living-to-plunge-at-fastest-rate-since-1920s.html; see also http://www.dailymail.co.uk/news/article-1350557/This-biggest-squeeze-families-1920s-warns-Bank-England-chief.html (“Mervyn King painted a picture of the nightmare facing millions of workers because of the toxic combination of soaring inflation and pay freezes or paltry pay rises“)
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Will Obama Dig Us Out Of The Second Great Depression? Do You Believe In The Tooth Fairy?
In another scintillating and scorching column, Ann Coulter writes:
See http://www.humanevents.com/article.php?id=41419
Even more sobering than Ann Coulter’s often humorous insights is a Wall Street Journal editorial entitled, “After You, Mr. Ryan”—and subtitled, “The President says the deficit is the GOP’s problem now”—which states in pertinent part:
See http://online.wsj.com/article/SB10001424052748703293204576106293283157786.html?mod=WSJ_Opinion_LEADTop
Having let former House Speaker Nancy Pelosi and her fellow Democrats in Congress write the legislation that has put our great nation in its present financial bind, it is not surprising that Obama would once again abdicate his responsibilities and try to shift blame to others.
The Journal’s editorial continues:
Again, Obama is a far-Left, anti-war, raving narcissist who has been weakening this great nation at every turn since he became the president. He must be removed from office at the earliest date possible, before he can do even greater damage.
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The Scent Of Jasmine Spreads
This is the title of an article in the UK’s Economist—about the protests in Tunisia that toppled its government, and in Yemen and Egypt—which is worth reading.
See http://www.economist.com/node/18010573?story_id=18010573&fsrc=nlw|hig|01-27-2011|editors_highlights; see also http://www.telegraph.co.uk/news/worldnews/africaandindianocean/egypt/8289686/Egypt-protests-Americas-secret-backing-for-rebel-leaders-behind-uprising.html (“Egypt protests: America’s secret backing for rebel leaders behind uprising”) and http://blogs.abcnews.com/politicalpunch/2011/01/axelrod-president-obama-has-on-several-occasions-directly-confronted-mubarak-on-human-rights-for-the.html
After Tunisia, Yemen and Egypt, where will the chaos spread next, and topple governments? Jordan, other Arab countries (including Iran), Europe, Russia, North Korea, China, the UK, America and beyond? Farfetched, you say? Think again.
As I have written, the world is in the throes of the “Great Depression II,” which economic historians will describe as such (or by using similar terms) 20-40 years from now. Yes, there will be “green shoots” from time to time, indicating that a recovery is underway, just as such signs appeared during the last Great Depression—which only ended with the onset of World War II.
The politicians on both sides of the Atlantic are flailing around, trying to come up with solutions, when there are none. Not only is there a yearning for democracy, but the world is facing economic problems that have not been seen since the last Great Depression. As I wrote more than a year ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html; see also http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele
Hold on tight. Things will get very ugly. The chickens are coming home to roost, in the Middle East and elsewhere. In all likelihood, cowardly anti-war President Barack Obama—who failed to come to the aid of those courageous Iranians who were tortured and killed after rising up in protest against the disputed victory of President Mahmoud Ahmadinejad, following the 2009 Iranian presidential election—and other politicians will be swept out of office. And yes, “the scent of the jasmine revolution,” as the Tunisians are calling their national upheaval, is in the process of spreading worldwide.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/ and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/; see also the comments beneath both articles
The Economist has said:
See http://www.economist.com/node/18010573?story_id=18010573&fsrc=nlw|hig|01-27-2011|editors_highlights
This may be true of other people too—for example, in Iran, North Korea and eventually Russia and China—or chaos might reign. Whatever the future holds, we may be living in a decade that truly changes lives as well as the world.
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Will Barack Obama Go Down In History As The President Who Lost The Middle East?
As I have written:
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected
He is a cowardly demagogue, who failed to come to the aid of those courageous Iranians who were tortured and killed after rising up in protest against the disputed victory of President Mahmoud Ahmadinejad, following the 2009 Iranian presidential election.
It was a seminal moment in Obama’s presidency up to that point in time. He flinched, and demonstrated to the world that he is not a true small-“d” democrat; and that he is weak like Jimmy Carter was. He stood with our enemy, the theocracy in Iran.
With respect to Egypt, the United States must do whatever is necessary to make sure that radical Islam does not take over the country. If it happens, and if that spreads—for example to Jordan, another ally of ours and of Israel—at the very least Obama will go down in history as the president who lost the Middle East. Also, this might determine the fate of Israel.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1344; but see http://online.wsj.com/article/SB10001424052748703833204576114252976824050.html?mod=WSJ_Opinion_LEADTop (“Egypt . . . has the opportunity to become what it always should have been—the leader of a movement toward freedom and democracy in the Arab world”)
Political pundit and former Bill Clinton adviser, Dick Morris, has warned:
See http://www.dickmorris.com/blog/who-lost-egypt/
The United States cannot afford to lose Egypt, Jordan and other allies in the region. Among other things, Obama is pulling our forces out of Iraq; and a debacle is likely to follow in Afghanistan too, which seems to be a lost cause. All of this might determine the fate of Israel.
See, e.g., http://news.yahoo.com/s/ap/20110201/ap_on_re_mi_ea/ml_iraq;_ylt=Akg0dRp1i4NSyUsUi6YKt.0LewgF;_ylu=X3oDMTJkdnRuaHE2BGFzc2V0A2FwLzIwMTEwMjAxL21sX2lyYXEEcG9zAzEEc2VjA3luX3BhZ2luYXRlX3N1bW1hcnlfbGlzdARzbGsDc2VuYXRlcmVwb3J0 (“American diplomats and other mission employees may not be safe in Iraq if the U.S. military leaves the volatile country at the end of the year as planned, according to a new report released [by the U.S. Senate Foreign Relations Committee]”)
As I have written:
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected (emphasis added)
Obama might tragically alter America’s history by losing the Middle East.
The Israelis are deeply and justifiably concerned. In an important article entitled, “Israel shocked by Obama’s ‘betrayal’ of Mubarak,” Reuters has reported:
See http://www.reuters.com/article/2011/01/31/us-egypt-israel-usa-idUSTRE70U53720110131; see also http://apnews.myway.com/article/20110130/D9L2Q1Q00.html (“If Egypt resumes its conflict with Israel, Israelis fear, it will put a powerful Western-armed military on the side of Israel’s enemies while also weakening pro-Western states like Jordan and Saudi Arabia”)
Also, in an article captioned, “Israel Watches ‘Regional Earthquake’ in Egypt,” the Wall Street Journal has reported:
See http://www.naegele.com/documents/IsraelWatchesRegionalEarthquakeinEgypt.pdf
The battle of Cairo has begun, just as battles have begun elsewhere in the Middle East. They will be ugly and brutal. When the dust settles finally, America’s “Hamlet on the Potomac”—or “Jimmy Carter-lite”—Barack Obama might have lost the region, just as Carter lost Iran to Islamic fascists. The consequences will be mind-boggling.
See also http://online.wsj.com/article/SB10001424052748703445904576117801815760950.html?mod=WSJ_hp_LEFTTopStories#articleTabs%3Dinteractive (The Wall Street Journal’s Interactive Timeline of “Regional Upheaval” in the Middle East)
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American Home Ownership Falls to Preboom Levels
The Wall Street Journal is reporting:
See http://online.wsj.com/article/SB10001424052748704254304576116402472968150.html?mod=WSJ_newsreel_us
The trends described in this Journal article are apt to continue and get much worse between now and the end of this decade, as the “Great Depression II” continues to take its toll. Yes, there will be “green shoots” from time to time just as there were during the Great Depression of the last century, leading some people to believe that the worst has passed. However, only “dead weeds” or disappointments and fears are likely to follow.
See also http://www.latimes.com/business/la-fi-cash-only-20110301,0,2765168,full.story (“Cash-only home sales rise in California”) and http://www.usatoday.com/money/economy/housing/2011-05-26-foreclosure-discounts_n.htm (“Foreclosure homes are selling at a 27% discount to non-distressed properties nationwide, but discounts are far larger in some states”) and http://www.msnbc.msn.com/id/43175612/ns/business-personal_finance/ (“Sales of homes in some stage of foreclosure . . . accounted for 28 percent of all home sales—a share nearly six times higher than what it would be in a healthy housing market. . . . ‘It’s an astronomically high number'”)
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Ireland: An Age Of Recklessness
The BBC News has an article entitled, “Loss of faith in the Irish fairy tale,” which is worth reading.
See http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/9401513.stm
What this article does not state—but it should—is that the worst is yet to come. While house prices have collapsed already, and there are empty houses that nobody will buy, Ireland has not even seen the half of it.
The economic tsunami is still rolling worldwide that has given rise to the “Great Depression II”—which economic historians will describe as such (or by using similar terms) 20-40 years from now—and it might not end during this decade. Irish property values will crash even more, perhaps declining another 50 percent; and the bottom is nowhere in sight.
The writer of the BBC article noted:
This is simply the tip of an enormous iceberg. As I wrote almost two years ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
The chickens are coming home to roost, and Ireland will be hit harder than most countries.
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The New Wave Of Emigration Dooms Ireland, And Even Guinness Reels
The Wall Street Journal has an important article that describes the new wave of Irish emigrants who are turning their backs on the Emerald Isle, which is mired in an economic collapse—and is likely to sink even farther during the balance of this decade. The article is worth reading, and states in pertinent part:
See http://www.naegele.com/documents/IrelandHasFlashbacksasThousandsEmigrateforBetterLife.pdf (“Irish Remedy for Hard Times: Leaving“); see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1442 (“Ireland: An Age Of Recklessness“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1018 (“Ireland Is Collapsing, And Aer Lingus Feels It Acutely“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1011 (“Irish Cutbacks Pile It On For ‘New Poor’“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-980 (“British Banks Have $225 billion Exposure To Ireland’s Economic Crisis“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-951 (“Ireland’s Fate Tied to Doomed Banks“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-779 (“Ireland, Portugal Stir European Fears“)
. . .
Lastly, the Wall Street Journal has an article entitled, “As Ireland Staggers, Guinness Reels,” which describes Ireland’s other woes:
See http://www.naegele.com/documents/IrelandsWoesDealBlowtoGuinness.pdf
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An Epic Political Moment Of Singular Clarity
This is in essence how the Washington Post’s Charles Krauthammer has described the turmoil gripping statehouses in Wisconsin, Ohio, Indiana and soon others. He has written another terrific column, which states in pertinent part:
See http://www.washingtonpost.com/wp-dyn/content/article/2011/02/24/AR2011022406520.html
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Bernie Madoff: The Market Is A Whole Rigged Job, And There’s No Chance That Investors Have In This Market [UPDATED]
Convicted swindler and consummate narcissist Bernard Madoff is serving a 150-year sentence at the Federal Correctional Institution in Butner, North Carolina for his $65 billion Ponzi scheme. He was interviewed by New York Magazine, and its terrific article states in pertinent part:
See http://nymag.com/news/features/berniemadoff-2011-3/ (emphasis added); see also http://online.wsj.com/news/articles/SB10001424052702303722104579242703723473552 (“My Interview With Madoff”)
Madoff’s views are consistent with my own—especially about “technical traders,” and the fact that average Americans should not be in the stock market at all—which are discussed in an October 2009 interview:
See http://seekingalpha.com/instablog/2951-market-shadows/31177-interview-with-timothy-d-naegele; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-3150 (“Fed Is Creating The Mother of All Bubbles“)
As the economic tsunami continues to roll worldwide, other market fraud and vulnerabilities will be exposed, which might make Bernie Madoff’s machinations seem like child’s play.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/
. . .
Also, in a fascinating Lara Logan interview with Las Vegas sports betting legend Billy Walters, CBS’ “60 Minutes” reported:
See http://www.cbsnews.com/stories/2011/01/13/60minutes/main7243443.shtml?tag=currentVideoInfo;segmentTitle (emphasis added) and http://www.cbsnews.com/video/watch/?id=7253011n&tag=related;photovideo
Walters’ views are consistent with those of Bernie Madoff and my own.
Also, in a Wall Street Journal article about Walters, it is reported:
See http://online.wsj.com/article/SB10001424052748703385404576259261181427714.html?mod=WSJ_hps_sections_realestate (emphasis added); see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-3176 (“The Higher Home Prices Rise, The Farther They Will Fall When The Bubble Bursts“)
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Preserving And Enhancing America’s Military Might During Difficult Economic Times, And Forever
Author Mark Helprin wrote a fine article in the Wall Street Journal about the need to maintain America’s Navy, and not allow it to decline. I agree with his goals completely.
See http://www.naegele.com/documents/TheDeclineofUSNavalPower.pdf
However, there is more to this issue that must be noted.
First, those who venture close enough to the Somali coast to place themselves at risk should not expect the U.S. Navy to rescue them.
It has been suggested that a joint military effort be undertaken by all the countries whose ships have been attacked or are at risk. My understanding is that there are joint operations globally to defend critical shipping lanes. Indeed, even China has contributed military forces to those efforts.
See, e.g., http://www.economist.com/blogs/asiaview/2011/03/chinas_foreign_policy
Yes, it might be ironic if China were to unleash a crippling attack on the Somali pirates and their bases, and thereby earn the respect and admiration of people worldwide. However, the Somali pirates are like gnats: bothersome, but not really dangerous in terms of America’s global commitments.
Yes too, the recent killing of the four sailors went awry, as any hostage taking negotiations can do. I concur that the Somali thugs should be terminated.
Second, Helprin noted: “[W]e are in effect an island nation.” This is how most Americans view their country. Many have never flown on an airplane, nor ventured far from where they grew up; and it is surprising how many sophisticated, wealthy, educated Americans have never been to Europe, or out of the States, or to other parts of the world. Their views are insular, which is reflected in American policies and outlook.
I believe in our great country, and in the inherent wisdom of the American people, and my comments are not intended to disparage them one iota.
See https://naegeleblog.wordpress.com/2010/02/26/america-a-rich-tapestry-of-life/
Third, I concur with Helprin that vital U.S. national security and economic interests demand a large blue-water fleet. He adds: “As China’s navy rises and ours declines, not that far in the future the trajectories will cross.” I concur with that conclusion too. Both China and “dictator-for-life” Putin’s Russia are our enemies, now and in the future.
See https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/ and https://naegeleblog.wordpress.com/2010/02/09/russias-putin-is-a-killer/ (see also the footnotes and comments beneath both of these two articles)
Fourth, Helprin states:
I agree; and the same thing is true of other vital military needs and expenditures. Tragically, at present, we have a naïve, anti-war, far-Left, “Hamlet on the Potomac”—or “Jimmy Carter-lite”—narcissistic president, who is a cowardly demagogue. He is determined to weaken our great nation at every turn; and he must not be reelected.
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ and https://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/ (see also the footnotes and comments beneath both of these two articles)
Fifth, it has been suggested that American military expenditures are equal to many times what the next countries combined are spending. Hence, the question arises: where is the money going?
There is no question that—like it or not—the United States must maintain its absolute superiority now and in the future. No nation must be in a position to ever challenge us. Our very survival depends on it.
See, e.g., https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/
As I told a friend recently, who had commented on a Pentagon report that China may have triggered our economic crash:
See, e.g., https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/#comment-1467
I spent two years working at the Pentagon in intelligence, and then I have worked on and with Capitol Hill for most of my legal career. During this time, I have had an opportunity to see many federal government agencies and programs in action; and I can honestly say that the Pentagon is the best by far. There is no agency or program that is even remotely close.
The people who work at the Pentagon and serve our military—both in uniform and as civilians—are totally dedicated and professional; and they have inspired enormous pride in me over the years. If you read any of my articles, you will realize that I do not spare my criticism of people and institutions; and I am not naïve. Some people might assert that I am cynical; I prefer to believe that I am an idealist, who is repulsed when I encounter something that is less than just or the best.
The Pentagon and our military are not perfect, but they are truly excellent. There are reasons why the Soviet Union collapsed and we are the only superpower in the world today. It did not just happen by chance.
This enormous power must be maintained and nourished. I will repeat—because it deserves emphasis again and again—our very survival depends on it. This is not a “Mary Poppins” world in which we live. There are countries and terrorist groups around the world that want to destroy our great nation, and kill all of us. This is a fact of life, period.
What follows are the comparative numbers relating to our military expenditures vis-à-vis those of other countries. There may be more recent numbers that are available publicly, but I have not seen them.
See http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures#Chart_by_country_or_organization
For better or worse, America protects the free world; we encourage those countries and people who yearn for democracy and freedom; we are winding down a very successful war in Iraq, which I questioned and opposed at the outset, but was impressed that George W. Bush’s “surge” worked and won that war; we are mired in the Afghan War, which Barack Obama does not seem to have the will or determination to win; and we have commitments that are essentially endless.
We have no allies that are capable of doing any “heavy lifting” today. The UK is “gutting” its military; NATO is a mere shell of what it once was; and we are it—with very heavy duties and responsibilities. After having worked in and with government for so many years, I believe government is a vast wasteland, most of which should be eliminated. The one exception would be the Pentagon and our brilliant and, yes, wonderful and awe-inspiring military forces.
. . .
Update:
The UK’s Daily Mail has reported:
See http://www.dailymail.co.uk/news/article-1365156/14-Somali-pirates-accused-killing-U-S-sailors-appear-Virginia-court-yacht-hijack.html (“14 Somali ‘pirates’ accused of killing four U.S. sailors appear in Virginia court over yacht hijack”)
Thus, even though the four sailors apparently placed themselves at risk by venturing into dangerous waters, and they should not have expected the U.S. Navy to rescue them, nonetheless the Navy attempted to do so and is bringing their killers to justice. It is another example of our brilliant military at work.
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World’s Biggest Bond Fund Eliminates U.S. Government-Related Debt
Bloomberg has reported:
See http://www.bloomberg.com/news/2011-03-09/gross-drops-government-debt-from-pimco-s-flagship-fund-zero-hedge-reports.html (emphasis added)
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Among The Many Reasons Why Obama Must Go
The Wall Street Journal has an interesting article—which was written by a member of the European Parliament, Daniel Hannan—that essentially articulates the reasons why Barack Obama must not be reelected, and how he is leading America is the wrong direction. In it, he states in part:
See http://online.wsj.com/article/SB10001424052748703559604576176620582972608.html?mod=WSJ_hps_sections_opinion#articleTabs%3Darticle
Clearly, Europe is not in great shape economically; and it will get far worse between now and the end of this decade.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally (see also the footnotes and comments beneath the article)
Clearly too, while Obama might want “a less arrogant America,” he personifies arrogance and narcissism.
He wants “a transfer of sovereignty to global institutions.” After all, he never set foot on the American mainland until he attended Occidental College in Los Angeles and Columbia University in New York City. When he was there, he described his presence as follows:
His core beliefs are at odds with those of most Americans, which would have been evident if we had read his book, “Dreams from My Father,” before the 2008 election.
Also, Hannan is correct that Obama is pursuing “a program of comprehensive Europeanization,” despite his ingrained disdain for British and European cultures, which shines through in his book.
See https://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/
Next, Hannan asks and answers his own question: “Is a European future truly so terrible?” Yes, he says; and as mentioned above, economically this is likely to be true, and socially too. Also, NATO is a mere shell of its former self; and militarily, the countries of Europe are pathetically weak.
Hannan makes an interesting observation that “an entire political class has grown up [in Europe] believing not just in the economic superiority of euro-corporatism but in its moral superiority.” Lacking the core beliefs of most Americans because of his heritage, Obama feels essentially the same way and has acted on such core beliefs.
Lastly, on balance, Hannan’s observations are correct, which is why Obama and the Democrats were rejected in last year’s mid-term elections, and why the same thing is likely to happen next year as well. The American people have had their fill of the grand “Obama experiment,” and will reject him like they rejected Jimmy Carter in 1980.
Indeed, as mentioned above, it has been said:
This is an understatement.
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected (see also the footnotes and comments beneath the article); see also http://online.wsj.com/article/SB10001424052748704893604576200910152041584.html?mod=WSJ_hps_sections_opinion (“When the U.S. fails to lead, every nation recalibrates its interests and begins to look out for itself first”) and http://hosted.ap.org/dynamic/stories/U/US_OBAMA_CAMPAIGN_ENTHUSIASM?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-03-15-06-33-15 (“Obama’s team seeks new ways to fire up his base”)
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Banks Have $2.5 Trillion Exposure To Ailing Quartet Of Portugal, Ireland, Greece And Spain
An article in the UK’s Telegraph states that the total exposure of foreign banks to Portugal, Ireland, Greece And Spain (the “PIGS”) tops $2.5 trillion once all forms of risk are included, according to the latest data from the Bank for International Settlements. Indeed, the UK Telegraph’s Ambrose Evans-Pritchard has written:
See http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8379302/Banks-have-1.6-trillion-exposure-to-ailing-quartet-of-Greece-Ireland-Portugal-and-Spain.html; see also http://en.wikipedia.org/wiki/PIGS_(economics) (“PIGS (economics)”)
If anything, the $2.5 trillion estimate will prove to be low, because the problems have been underestimated and will be much worse. The total exposure of foreign banks will be even more staggering, and other economies will teeter on the brink—if not go under. The ripple effects both in Europe and globally will be enormous.
See, e.g., http://online.wsj.com/article/SB10001424052748703778104576286441287643636.html?mod=WSJ_hp_LEFTWhatsNewsCollection (“Greece’s Budget Deficit Higher Than Expected”)
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The Web Is Free!
TIME magazine has a very useful short article at its blog about television by its TV critic James Poniewozik—entitled, “NY Times Ending Free Digital Lunch (Mostly). Will You Pay?”—which is worth reading.
See http://tunedin.blogs.time.com/2011/03/17/ny-times-ending-free-digital-lunch-mostly-will-you-pay/
The Internet as a news source has burgeoned because it has been free. This underlies the culture of the Web; and those who defy its basic tenet may rue the day that they did.
Obviously the world has been shocked by unfolding events in Japan, after its massive earthquake, tsunami, nuclear meltdown and the tragic human suffering. The latest, most up-to-date news is found on the Web, not on America’s TV screens any more. Even the once-vaulted CNN is “recycling” its news, which means that we must go to the Web to learn about the latest developments. Not only are print newspapers becoming “dinosaurs,” but TV news is too.
See, e.g., http://www.ft.com/intl/cms/s/0/3eef0bc4-6f73-11e1-9c57-00144feab49a.html#axzz1pOnzLHsb (“Bleak outlook for US newspapers”)
When Rupert Murdoch was in the process of taking over the Wall Street Journal, he supported the doctrine that online news should be free. However, shortly afterward, he effectively imposed a “no fly zone” over his UK flagship newspaper’s Web site, the Times of London. My guess is the number of people who read that publication online today has plummeted.
Perhaps even more importantly, the ill will that the practice of blocking Internet users from access to the site’s articles, unless they pay, may greatly outweigh the revenues gained from its subscriptions. Indeed, my guess is that lots of Web users will boycott the Times for many years to come, both online and in print format, as a matter of principle.
This is an age when news sources are abundant all over the world. No one “needs” the Times or the New York Times anymore. I have been online for approximately 20 years; and I began posting useful links at my law firm’s Web site many years ago. Today, the list is so long, and our “News Of The World” section contains so many links to “free” news, that it is impossible to access more than a few of them each day because of time constraints.
See http://www.naegele.com/links.html
Every person has sites that are his or her favorites, so my list will not be yours. The bottom line, however, is that none of us “needs” the Times or the New York Times, and both may suffer greatly from their policies. Their Internet traffic may decline dramatically—if this has not happened already in the case of the Times—and a “silent” boycott of such sites may ultimately prove fatal to once-proud publications, and they may become more and more irrelevant.
Newspapers are dinosaurs now anyway, or at the very least “endangered species,” and such practices may seal their fate forever. Indeed, if the Times of London were to become totally free online again, it might take a long time before it would attract readers; and it might never regain what it once had.
Poniewozik is correct: “[T]his could be a disincentive for blogs to link to the [New York] Times.” Lots of us will be very reluctant to link to any of that newspaper’s articles out of a concern that we may end up with “dead links,” which would aggravate the readers of our blogs.
Lastly, lots of Web users—probably a majority—will never pay for any type of subscriptions offered by either the New York Times or the Times of London as a matter of principle. Again, and perhaps most importantly, such practices fly against the “sacred” culture of the Web: it is free!
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Debtors’ Prisons
The Wall Street Journal’s article entitled, “Welcome to Debtors’ Prison, 2011 Edition,” is worth reading. It states in pertinent part:
See http://online.wsj.com/article/SB10001424052748704396504576204553811636610.html?mod=WSJ_hps_editorsPicks_1; see also http://www.cbsnews.com/8301-505143_162-57577994/as-economy-flails-debtors-prisons-thrive/ (“As economy flails, debtors’ prisons thrive“)
As the American and other global economies decline during the balance of this decade, such draconian measures may be used more and more to collect debts and harass debtors.
See, e.g., http://en.wikipedia.org/wiki/Debtors'_prison
In the United States, it is unconstitutional to incarcerate someone solely for failing to pay a debt. For example, it violates (1) the Due Process Clause of the Fourteenth Amendment, (2) the Cruel and Unusual Punishment Clause of the Eighth Amendment (as applied to the States through the Due Process Clause of the Fourteenth Amendment), and (3) the Eighth Amendment contains the Excessive Fines and Excessive Bail Clauses.
See http://topics.law.cornell.edu/constitution/amendmentxiv (Section 1: “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws”) and http://topics.law.cornell.edu/constitution/billofrights#amendmentviii (Amendment VIII: “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted”)
In Florida, for example, the St. Petersburg Times stated in an editorial entitled, “Debtors’ prison—again”:
See, e.g., http://www.tampabay.com/opinion/editorials/article991963.ece; see also https://naegeleblog.wordpress.com/2012/02/07/poverty-in-america/ (“Poverty In America”)
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Euro’s Collapse Is Not ‘Unthinkable’: Warren Buffett
In an article with this title, it is reported:
See http://www.cnbc.com/id/42248019; see also http://blogs.telegraph.co.uk/finance/ianmcowie/100010007/house-prices-are-falling-faster-in-britain-than-spain/ (“House prices are falling faster in Britain than Spain”)
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America’s Next Ticking Financial Time Bomb: The Pension Benefit Guaranty Corp?
In an article by Greg Stiles entitled, “Harry & David asks to drop $27.4 million pension plan,” which appeared in Southern Oregon’s Mail Tribune, it is reported:
See http://www.naegele.com/documents/HarryandDavidaskstodroppensionplan.pdf; see also http://www.mailtribune.com/apps/pbcs.dll/article?AID=/20110330/NEWS/103300340
Granted, as the article points out: “Defined benefit plans have declined throughout corporate America during the past decade, giving way to more speculative 401(k) plans.” However, as the U.S. economy sours during the balance of this decade, query whether American taxpayers will not on the hook for essentially unlimited financial payouts?
Won’t the PBGC’s cash flow be inadequate to meet such payouts, giving rise to underfunded payouts like those pertaining to Social Security and Medicare? How can it possibly be said that such payouts will occur at no cost to the taxpayers? What are the potential dimensions of this economic “iceberg”?
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Foreign Banks Borrowed At Least 70 Percent Of The $110.7 Billion Borrowed From The Fed’s Discount Window!
This disclosure of the Fed’s lending during a week in October 2008 should prompt congressional reexaminations of the risks to U.S. taxpayers stemming from the Fed’s role in stabilizing global financial markets during economic crises.
In an important article entitled, “Foreign Banks Tapped Fed’s Lifeline Most as Bernanke Kept Borrowers Secret,” Bloomberg has reported:
See http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1497 (“Foreign Banks Borrowed At Least 70 Percent Of The $110.7 Billion Borrowed From The Fed’s Discount Window!”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1131 (“Low Rates Fail To Rescue Indebted Britain, The Eurozone Is In Need Of An Undertaker, The Euro Has One-In-Five Chances Of Survival, Market Alarm As US Fails To Control Biggest Debt In History, And China’s Property Bubble Has Grown So Huge That 85 Percent of Chinese Living In Cities Cannot Afford A Home”)
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While Most Of America Is Hurting Economically, The Super-Rich Are Richer Than Ever
This is the conclusion of University of California, Berkeley professor Robert Reich who is quoted by the AP as follows:
See http://hosted.ap.org/dynamic/stories/U/US_RICHARD_BRANSON_VENTURE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-04-05-03-26-18
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World’s Central Banks Pursue Divergent Strategies
In a fascinating and important article, the Wall Street Journal has discussed the divergent approaches being undertaken by the United States’ Board of Governors of the Federal Reserve System (or the “Fed”), by the European Central Bank (or “ECB”) and by central banks elsewhere in the world. Also, an interactive graphic is provided that depicts those actions.
See http://www.naegele.com/documents/CentralBanksGrappleWithCompetingForces.pdf (“Central Banks Grapple With Competing Forces”) and http://online.wsj.com/article/SB10001424052748703712504576245031446096202.html#articleTabs%3Dinteractive (“Interactive Graphics”)
As I have written previously:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
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Suicide Rates Climb As The Economy Declines
Bloomberg is reporting:
See http://www.bloomberg.com/news/2011-04-14/suicide-rates-rise-in-u-s-as-economy-declines-cdc-study-finds.html
First, as indicated in the article and comments above, we are in the midst of the “Great Depression II”—not a mere recession—which will not end until late in this decade, at the earliest. Yes, there will be “green shoots,” or signs that things are improving, which will give false hopes. However, the same thing was true during the Great Depression of the last century, which did not end until the onset of World War II.
Second, the results of the study are not surprising; and these statistics—and the individual human tragedies that they represent—will become even more pronounced in the United States and globally during the rest of this decade.
Third, it is unfortunate that the study does not take into account data after 2007, but at least it is a start.
Fourth, as I have written:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
The balance of this decade will be “ugly”—there is no other way to describe it. The political backlashes were evident already in last November’s American elections.
Lastly, there may be a newfound turning to God, on the part of many people globally, which will be healthy.
See, e.g., https://naegeleblog.wordpress.com/2010/05/12/what-and-where-is-god/
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Government Does Not Work, And Must Be Abolished Whenever And Wherever Possible
As if government incompetence could not get any worse, it has. In an article entitled, “Oops! US post service prints THREE BILLION stamps using the wrong Statue of Liberty,” the UK’s Daily Mail has reported:
See http://www.dailymail.co.uk/news/article-1377259/US-post-service-prints-3-BILLION-stamps-using-wrong-Statue-Liberty.html
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The Two-Speed Global Economy
The Wall Street Journal has a fascinating article about this subject, which is worth reading. It states in pertinent part:
See http://online.wsj.com/article/SB10001424052748703838004576274750183949910.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsTop; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1548 (“While Most Of America Is Hurting Economically, The Super-Rich Are Richer Than Ever”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1563 (“Suicide Rates Climb As The Economy Declines”)
Clearly, as my article above and the comments beneath it state, the worst is yet to come, both in the United States and globally. Politicians and economists will be overwhelmed during the balance of this decade, and their ranks will be decimated.
See also http://www.dailymail.co.uk/news/article-1379270/Economic-Chernobyl-Dems-accuse-GOP-kamikaze-budget-politics-14-300-000-000-debt-ceiling-debate-rages-on.html and http://rove.com/articles/311 and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1567
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The Times Ahead Do Not Look Pretty
This is the assessment of George C. Karlweis—”the former giant gnome of Geneva,” and “the brain behind Banque Privee, owned by the late Edmond de Rothschild”—which is set forth in an excellent article by UPI’s Editor at Large Arnaud de Borchgrave that is worth reading. It states in pertinent part:
See http://www.upi.com/Top_News/Analysis/de-Borchgrave/2011/04/26/Commentary-Big-Gnome-Cant-last/UPI-17111303816102/ (“Big Gnome: Financial situation can’t last”)
This article echoes what I have said for a long time now:
See http://www.americanbanker.com/issues/173_212/-365185-1.html; see also http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html (“America and other nations are in uncharted waters; and their politicians may face backlashes from disillusioned and angry constituents that are unprecedented in modern times”) and http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele (“I believe [the repeal of Glass-Steagall] was a mistake, just like I believe the entire notion of “deregulation” was a mistake, which Greenspan championed. The chickens have come home to roost already, with much more to come”)
I added:
See https://naegeleblog.wordpress.com/2010/04/23/is-financial-reform-simply-washingtons-latest-boondoggle/ (emphasis in original; footnote omitted)
I believe former Fed Chairman Paul Volcker would not have created the problems that Greenspan did; and that he would prefer to see “a full reinstatement” of Glass-Steagall. However, this may be impossible today. Humpty Dumpty fell off the wall, and as the children’s nursery rhyme says: “All the king’s horses and all the king’s men [c]ouldn’t put Humpty together again.” The same may be true of Glass-Steagall. Moreover, I believe the “Great Depression II” will be with us for at least the balance of this decade.
See also http://en.wikipedia.org/wiki/Humpty_Dumpty#Lyrics
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Sun Setting On British Power [UPDATED]
This is the title of an important Wall Street Journal article, which is consistent with everything that I have written above. The UK’s prime minister, David Cameron, is in the process of tragically “gutting” his country’s military power and relegating it to the position of some Third World banana republic.
In particular, the article states:
See http://www.naegele.com/documents/SunSettingonBritishPower.pdf (emphasis added); see also http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8573849/Navy-chief-Britain-cannot-keep-up-its-role-in-Libya-air-war-due-to-cuts.html (“Navy chief: Britain cannot keep up its role in Libya air war due to cuts”) and http://www.telegraph.co.uk/news/uknews/defence/8584032/Defence-chiefs-warn-cuts-threaten-security.html (“Senior defence figures have warned that cuts to Britain’s military have endangered the nation’s security, its relationship with the United States and the future of Nato”) and http://www.telegraph.co.uk/news/worldnews/southamerica/falklandislands/9042422/Argentina-doesnt-have-military-power-to-seize-the-Falklands-says-defence-minister.html (“It is arguable Great Britain will no longer have an Army—we will have a defence force. That is an absolutely disgraceful situation when faced by the uncertainty we are. The RAF is cut in half, the Royal Navy is emasculated; we do not have the capability in this country to do the things we have always done”)
Like Barack Obama, Cameron should be removed from office. Indeed, Obama has been undermining America’s national security capabilities, as well as those of the UK.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1606 (“Barack Obama’s Sacking Of The Pentagon”) and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1383 (“WikiLeaks cables: US agrees to tell Russia Britain’s nuclear secrets”); see also http://www.telegraph.co.uk/finance/economics/8672697/UK-households-squeezed-harder-than-US-or-Europe.html (“UK households squeezed harder than US or Europe”) and http://www.washingtonpost.com/opinions/charles-krauthammer-how-fractured-is-the-gop/2013/08/01/6fd6f816-fada-11e2-9bde-7ddaa186b751_story.html (“Today, alas, Britannia rules no waves. World order is maintained by American power and American will”)
If anything, the UK’s economy will get far worse during the balance of this decade, which will result in the further diminishment of the UK’s once-proud and mighty military prowess.
Contrariwise, Harvard economics professor and former chairman of the Council of Economic Advisers under President Reagan, Martin Feldstein, argued in an excellent article entitled, “Defense Spending Would Be Great Stimulus,” that all three American military service branches are in need of upgrade and repair.
See http://online.wsj.com/article/SB123008280526532053.html
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California Sinks . . . Farther . . . As U.S. Supreme Court Orders Release Of Approximately 46,000 Prison Inmates
The State of California—the eighth largest economy in the world—is bankrupt; its largest city, Los Angeles, is bankrupt too; vital public services are being curtailed if not eliminated entirely, including law enforcement; and now this . . . which may result in the dramatic increase of crime in the State.
In a sharply-worded dissent from the Court’s 5-4 decision, Justice Antonin Scalia called the ruling “staggering” and “absurd,” and warned that “terrible things are sure to happen.” This is an understatement.
See http://www.latimes.com/news/local/sc-dc-0524-court-prisons-web-20110523,0,2337401.story; see also http://online.wsj.com/article/SB10001424052702304066504576345553135009870.html?mod=WSJ_hp_LEFTTopStories (“[G]reater incarceration can explain about one-quarter or more of the crime decline”)
California is a microcosm of what is happening nationally and globally—and of what will happen even more during the balance of this decade.
See, e.g., http://www.bloomberg.com/news/2011-05-27/global-economic-rebound-weakens-on-quake-oil-price-european-debt-crisis.html (“Global Economic Rebound Weakens on Quake, Oil Price, European Debt Crisis”)
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Is The Arab Spring Being Hijacked By Ultra-Conservative Islamists, Similar To What Happened In Iran?
This was predictable, and now it seems to be happening. For example, Reuters has reported the words of one Cairo lawyer who is a Christian: “We did not risk our lives to bring Mubarak down in order to have him replaced by [ultra-conservative Salafist Islamists].” Reuters adds:
See http://ca.news.yahoo.com/christians-worry-egypt-being-hijacked-islamists-031322380.html
Will the “Scent of Jasmine” that began in Tunisia morph into a “stench” that engulfs the region? Only time will tell.
What is clear though is that following the rigged election of 2009 in Iran, countless Iranians who spoke out, protested and advocated freedom were beaten, jailed, tortured and killed, while Barack Obama—America’s “Hamlet on the Potomac,” or “Jimmy Carter-lite”—stood by helplessly and did nothing to come to their aid.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1316 (see also the article itself, as well as the footnotes and other comments beneath the article)
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Let China Or Russia Defend The UK
The UK’s Economist has an article entitled, “Keeping government hands off their benefits,” which is barely worth reading. It begins by advocating “massive cuts in America’s defence budget,” which would leave the UK defenseless, because its Prime Minister David Cameron is decimating the UK’s defense capabilities already.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1591 (“Sun Setting On British Power”)
We in America do not need to protect the UK anymore; let China or Russia do it, although—come to think of it—Putin’s Russia is effectively a Third World country militarily, and a mere shadow of what the Soviet Union once was.
See, e.g., https://naegeleblog.wordpress.com/2010/02/09/russias-putin-is-a-killer/ (“Russia’s Putin Is A Killer”) (see also the footnotes and comments beneath the article)
With respect to “NATO’s confused intervention in Libya,” which the Economist asserts, few Americans really care what happens in Libya, in large part because there is reason to believe that the Arab Spring will be hijacked by ultra-conservative Islamists, similar to what happened in Iran. The “Scent of Jasmine” that began in Tunisia may morph into a “stench” that engulfs the region; and the UK’s involvement in that campaign may prove to be a waste of financial and human resources.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1604
Also, there will be no cuts to Medicare and Social Security, which the Economist advocates. They are effectively the “third rail” of American politics—too hot to touch. Those who try will be rejected by the voters. If Obama had not wasted taxpayers’ monies on his so-called “Stimulus Package” and other programs, increasing our budget deficit dramatically, no one would be focused on cutting our defense budget, and Medicare and Social Security would be dealt with many years from now, if at all.
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We’re On The Verge Of A Great, Great Depression, And The Federal Reserve Knows It
These are the words of Peter Yastrow, market strategist for Yastrow Origer, which were reported by CNBC. Yastrow added:
See http://www.cnbc.com/id/43236764; see also http://www.dailymail.co.uk/news/article-1393237/US-economy-Were-verge-great-great-depression.html (“[T]he first quarter drop in house prices means they have fallen by more than during the Great Depression”)
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Gloom And Doom, As More Americans Think Economy Will Never Recover
This is the conclusion of CNBC, in an article that states:
See http://www.cnbc.com/id/43268037 (emphasis added)
What is becoming crystal clear is that the United States is not in a recession, but in the “Great Depression II,” which economic historians will describe as such—or by using similar terms—20-40 years from now. Yes, there will be “green shoots” from time to time, or signs that things are improving, but this was true during the Great Depression of the last century too, which did not end until the onset of World War II, at the earliest.
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Unfortunately, I am in agreement with you. Living in one of the states hardest hit by the severe economic situation does make me wonder if we will ever recover. The jobs are simply “not here”, so many have left my state, never to return, but I also wonder if they are finding employment elsewhere.
Speaking of cutting back, that is what I have done, knowing full well others have to. As an example, I used to eat out at least once a week, perhaps more when it was the week of my pay check. Now, once a month is a great treat!!! That being said, I am OK with spending less in restaurants,,,,,,,,,,,but also know that is not good for the restaurant industry.
I am not yet at the point of calling our current state of the nation to be in a Depression, but if I were to lose my job, I know I would be in a personal Depression. It is often said that attitude can make or break many accomplishments in life. Thank goodness I remain positive in this uncertain world. Living on less can be kind of fun.
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Homeowners Turn The Tables By Foreclosing On The Bank Of America
This is the title of an article in the UK’s Daily Mail about a south Florida couple who got sweet revenge when they foreclosed on the Bank of America, instead of the other way around. As the article stated:
See http://www.dailymail.co.uk/news/article-1394412/Nyergers-family-homeowners-turn-tables-foreclosing-ON-Bank-America.html
Sweet revenge, indeed. Hopefully this happens again and again, across the U.S. and in other countries; and banks and other lenders are taught a lesson.
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I saw this story yesterday, and had the same reaction–what a great example of true justice at work. Hopefully the story goes viral and becomes a source of inspiration to those that think they can’t fight back.
Of course, it appears that it does help to have the resources to do it.
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Nearly 40 Percent Who Borrowed Against Their Homes Are Underwater
In a very sobering article entitled, “Second-Mortgage Misery,” the Wall Street Journal notes:
See http://online.wsj.com/article/SB10001424052702304906004576369844062260756.html?mod=WSJ_hp_LEFTTopStories#articleTabs%3Darticle (emphasis added); see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1563 (“Suicide Rates Climb As The Economy Declines”)
This is an excellent article, which only captures the tip of an enormous iceberg.
More and more Americans will lose their homes, and the human suffering will be unfathomable, and it will last at least through the end of this decade. Second mortgages are merely one facet of the human tragedy that is unfolding.
The “bottom” of the housing market will not be reached for about five more years; and it will be brutal between now and then. Those who sit on the sidelines patiently, with cash, will be rewarded. There will be bargains galore; and today’s prices will fall at least another 50 percent.
Hold on tight, it will be very ugly—in the United States, Europe (e.g., Ireland, the UK), Asia and on a global scale.
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Wow, if prices drop another 50%, the bank is probably going to want their home equity loan back, and I haven’t even tapped it yet. Sometimes I wonder why I don’t follow the crowd, spend away, and worry about it later.
My dad’s family survived the last depression on a farm in North Dakota. They were frugal and self-sufficient, and did quite well. On the other hand, both my wife and I lost our corporate jobs during the downturn that started in 2000. Myself in 2004, and she, this year. As they say, it’s only a recession if your neighbor loses his job. It becomes a depression when you lose your own job.
Luckily, we didn’t overextend ourselves, so we can go a year before dipping into retirement assets. And long after, due to being savers during our working years.
But the amazing thing is…the family farm may save the day again. Seems they are about to drill for oil on our farm as it was located atop one of the richest pools of oil in North Dakota. Never been a religious man, but I’ve been giving a lot of thanks to my long-gone ancestors lately. I think they knew that land would take care of the family forever.
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Thank you for your additional comments.
With respect to your first paragraph, it might be most prudent not to spend the money, as you know. Hold it in reserve for a “rainy day,” but act conservatively and avoid using it.
I agree with your second paragraph; however, during the balance of this decade, such job losses will sweep the United States and other countries, and the human suffering will be staggering.
With respect to your last paragraph, congratulations! I have a lawyer-friend who inherited two farms in South Dakota, but no oil yet. He has been benefiting from high crop prices though, and is very thankful.
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CNN Poll: Obama Approval Rating Drops As Fears Of Depression Rise
This is the title of an important CNN article, which is worth reading. It states in pertinent part:
See http://politicalticker.blogs.cnn.com/2011/06/08/cnn-poll-obama-approval-rating-drops-as-fears-of-depression-rise/; see also http://cnsnews.com/news/article/after-28-months-stimulus-spending-19-mil (“1.9 Million Fewer Americans Have Jobs Today Than When Obama Signed Stimulus”) and http://www.cnbc.com/id/43441924 (“Misery Index” Highest In 28 Years)
Since before this blog began in December of 2009, I have maintained that the United States and other countries worldwide are in the mist of the “Great Depression II.” If anything, the empirical data and other similar findings set forth at this blog support that conclusion. It has been stated again and again that 20-40 years from now, economic historians will describe the end of the last decade and the current decade as an economic depression, not a recession, drawing parallels between this period and the Great Depression of the last century that did not end until the outset of World War II—or perhaps at the end of it.
Also, I have maintained that “green shoots”—or signs that things are improving—may appear from time to time, similar to what happened during the Great Depression, and hopes may rise. However, in all likelihood, they will be short-lived and dashed as the green shoots turn into “dead weeds,” and the economic tsunami continues to roll worldwide, bringing enormous suffering to millions of people. With respect to the housing sector alone, I have predicted that the “bottom” will not be reached for at least another five years; and that those who sit on the sidelines and wait patiently, with cash, will find bargains galore and be rewarded handsomely.
See, e.g., http://www.americanbanker.com/issues/173_212/-365185-1.html (“Greenspan’s Fingerprints All Over Enduring Mess”) and http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele (“Greenspan’s legacy: more suffering to come”—”Interview with Timothy D. Naegele”); see also https://naegeleblog.wordpress.com/2010/05/16/will-the-eus-collapse-push-the-world-deeper-into-the-great-depression-ii/ (“Will The EU’s Collapse Push The World Deeper Into The Great Depression II?”) and https://naegeleblog.wordpress.com/2010/04/23/is-financial-reform-simply-washingtons-latest-boondoggle/ (“Is Financial Reform Simply Washington’s Latest Boondoggle?”) and https://naegeleblog.wordpress.com/2009/12/16/the-great-depression-ii/ (“The Great Depression II?”)
More and more observers are agreeing with what has been stated at this blog; namely, the Great Depression II is here to stay, at least through the balance of this decade, and the human suffering is and will continue to be unfathomable. As I stated in an article entitled, “Euphoria or the Obama Depression?” that was published by the McClatchy Newspapers and McClatchy-Tribune News Service on April 8, 2009:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
I have contended that “Barack Obama Is A Lame-Duck President Who Will Not Be Reelected,” and this conclusion is becoming more and more evident to millions of Americans and others worldwide.
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ (see also the footnotes and comments beneath the article); see also https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1617 (“Why Barack Obama May Be Heading For Electoral Disaster In 2012”) and http://www.bloomberg.com/news/2011-06-22/obama-gets-30-of-americans-certain-to-support-re-election-in-economy-poll.html (“Obama Gets 30% of Americans Certain to Support Re-Election in Economy Poll”) and http://online.wsj.com/article/SB10001424052702304657804576401653113017130.html?mod=WSJ_hp_mostpop_read (“President Barack Obama is likely to be defeated in 2012”)
. . .
In a CNBC article entitled, “US Is Nearing Even Worse Financial Crisis: Jim Rogers,” financial “guru” and international investor Jim Rogers’ sobering assessments are cited:
See http://www.cnbc.com/id/43328325; see also http://www.cnbc.com/id/43354054 (“JPMorgan Forecasts Another Drop in Home Prices”) and http://www.marketwatch.com/story/many-of-us-wont-be-able-to-retire-until-our-80s-2011-06-09 (“Many of us won’t be able to retire until our 80s”)
CNBC has reported:
See http://www.cnbc.com/id/43395857 (“US Housing Crisis Is Now Worse Than Great Depression”)
In another important Wall Street Journal article entitled, “The Great Property Bubble of China May Be Popping,” it has been reported:
see http://www.naegele.com/documents/TheGreatPropertyBubbleofChinaMayBePopping.pdf; see also https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/ (“China Is America’s Enemy: Make No Mistake About That”) and http://www.dailymail.co.uk/news/article-2005231/Chinas-ghost-towns-New-satellite-pictures-massive-skyscraper-cities-STILL-completely-empty.html (“China’s ghost towns: New satellite pictures show massive skyscraper cities which are STILL completely empty”) and http://www.telegraph.co.uk/finance/china-business/8598998/Enter-the-dragon-to-save-the-euro.html (“Enter the dragon ‘to save the euro’”)
The economic tsunami that was unleashed several years ago continues to roll worldwide, producing tragic human suffering that will increase exponentially during the balance of this decade.
Hold on tight. The worst is yet to come. Things will get very ugly between now and the end of this decade, both in the United States and globally!
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It’s not a very popular message, but indeed, all sign are red…
There is an insufficient consumer trust, due to anger for the economic future, feed by unemployment,by fall of housing prices and stocks. The public sector is absorbing more and more debts to try to boost the economy. Despite this, there a lack of real economic growth. The so called “growth figures” are bought by programs as QE2. At the end of this cyclus, hyperinflation will occur, without growth, this will lead to severe stagflation and a second worldwide depression.
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Thank you, Oliver, for your comments.
Yes, many people agree with you. My guess is that some stagflation will occur, but deflation will prevail. Indeed, massive deflation of housing prices and values is occurring already, with much worse yet to come.
Because the net worths of so many Americans and other nationalities depend on their equity in housing, this alone will contribute greatly to the depression.
Government tax revenues will fall, consumer spending will fall dramatically, and the downward pressures will be enormous.
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America Is Losing Its Grip
This is the grim warning of outgoing Secretary of Defense Robert Gates. His admonitions continue:
See http://www.newsweek.com/2011/06/19/the-defense-rests.html?om_rid=NsfkQq&om_mid=_BN-f69B8bzy3X1
America’s “prince of darkness”—or its “Hamlet on the Potomac” and “Jimmy Carter-lite”—Barack Obama is doing everything in his power to destroy our military might, after having added dramatically to our nation’s budget deficit that is sapping our economic vitality and strength. He would have the United States become a UK militarily, or worse, which is why he is sending Leon Panetta to the Pentagon, to “gut” it.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1591 (“Sun Setting On British Power”)
Ronald Reagan encountered Obama’s negativism when he came to the White House in the wake of Carter’s presidency; and he turned our ship of state around, and changed the course of history. Our enemy, the once-mighty Soviet Union, collapsed and is gone today; and America has reigned supreme ever since, as the world’s only superpower.
Accordingly, Obama must be sent packing either to Chicago or Hawaii no later than January of 2013, to write his memoirs and work full time on his presidential library. He a tragic Shakespearean figure who will be forgotten and consigned to the dustheap of history, like Lyndon Johnson and Jimmy Carter before him—unless he tragically alters the course of American history.
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Debt Crisis May “Overwhelm” Euro Zone
This is the title of a Wall Street Journal article, which is consistent with what I have written above, albeit far too optimistic. It states in pertinent part:
See http://online.wsj.com/article/SB10001424052702303936704576397470527710588.html?mod=WSJ_hp_LEFTWhatsNewsCollection; see also http://www.telegraph.co.uk/news/worldnews/europe/eu/8585704/Boris-Johnson-let-Greece-go-bankrupt-and-leave-the-euro.html (“Boris Johnson: let Greece go bankrupt and leave the euro”)
As the banks’ balance sheets are battered even more (e.g., by reason of further declines in housing prices, and ensuing defaults), it will be difficult if not impossible to shore up their capital positions.
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Confidence In Housing Values Plummets
This is the conclusion reached by the Rasmussen polling organization, which is summarized as follows:
See http://www.rasmussenreports.com/public_content/business/housing/june_2011/confidence_in_housing_values_plummets; see also http://finance.yahoo.com/news/Home-sales-fell-to-2011-low-apf-682403843.html (“Home sales fall to 2011 low; few 1st-time buyers”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1638 (“CNN Poll: Obama Approval Rating Drops As Fears Of Depression Rise”)
Homeowners are just catching up with what is happening to home prices in the marketplace, which will decline at least another 50 percent in the next five years or so. Homeowners will be wiped out, and lose their homes on an ever-increasing basis. In the interim, effectively they will be nothing more than renters, with the banks and other lenders actually owning their homes.
Homebuilders and realtors are fraudulently pushing homeownership, when in fact the opposite is true. More homebuilders and realtors will lose their jobs; and their respective industries will be decimated. Those Americans and others globally who sit patiently on the sidelines with cash will be handsomely rewarded when the “bottom” is reached finally and there are bargains galore for those who are able to “bottom feed.” Cash will be king!
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In Fleeing Afghanistan, The West Relinquishes Its Grip On The World
This is the title of an interesting and sobering article by Peter Oborne—who is the UK Daily Telegraph’s chief political commentator—which is worth reading.
See http://blogs.telegraph.co.uk/news/peteroborne/100093677/in-fleeing-afghanistan-the-west-relinquishes-its-grip-on-the-world/
Oborne is mistaken: Richard Nixon did not lose the Vietnam War; Lyndon Johnson and the U.S. Congress did. As someone whom I know has written—who is a syndicated columnist and an outstanding reporter with impeccable, world-class credentials, based in Washington, D.C.:
See https://naegeleblog.wordpress.com/2010/10/04/john-f-kennedy-the-most-despicable-president-in-american-history, fn. 10.
Among other things, Oborne wrote:
What Oborne should have said, and did so implicitly, is that Barack Obama is responsible for what has been happening in Afghanistan, Iraq and elsewhere in the region; and he will be blamed for it—by the American people and by history.
Despite the wishful thinking of many, America is not in decline—any more than it was when Henry Kissinger and Jimmy Carter articulated similar beliefs.
One thing is crystal clear though: Obama must be forced from the U.S. presidency at the earliest possible date, and no later than January of 2013. He is an unmitigated disaster—a narcissistic demagogue, and America’s “Hamlet on the Potomac” and “Jimmy Carter-lite”—and his departure cannot happen fast enough!
See, e.g., https://naegeleblog.wordpress.com/2010/09/09/are-afghanistan-iraq-and-pakistan-hopeless-and-is-the-spread-of-radical-islam-inevitable-and-is-barack-obama-finished-as-americas-president/ (“Are Afghanistan, Iraq And Pakistan Hopeless, And Is The Spread Of Radical Islam Inevitable, And Is Barack Obama Finished As America’s President?”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/ (“The Economic Tsunami Continues Its Relentless And Unforgiving Advance Globally”) and https://naegeleblog.wordpress.com/2010/02/26/america-a-rich-tapestry-of-life/ (“America: A Rich Tapestry Of Life”) and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1637 (“CNN Poll: Obama Approval Rating Drops As Fears Of Depression Rise”) (see also the footnotes and comments beneath these articles)
. . .
The people who will suffer the most in Afghanistan when we pull out will be its women. Indeed, Obama will be giving Afghan women and young girls the “gift” of horrific Taliban rule once again, which will be inhumane.
American women, and women and women’s rights organizations worldwide, must rise up and tell Obama that a pull-out is acceptable only if he is willing to send his two girls to school in Afghanistan now and after the pullout—instead of their fancy school in the Washington, D.C. area—and he actually does this.
Tragically, we know what the Taliban will do—including the brutal killing, raping and disfiguring of Afghan women—for example, by cutting off their noses and ears. We need only ask “Aisha” (or the brave “Bibi”), and look into her eyes and at her once-beautiful features that were disfigured.
There are no mysteries about what Obama’s Afghan policies will produce—which is merely one of a multitude of reasons why his presidency must end as soon as humanly possible.
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1102 (“Why We Fight In Afghanistan, And Why American Women Should Demand Barack Obama’s Removal From Office By Impeachment Or Otherwise”) (see also the article itself, as well as the footnotes and other comments beneath it)
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Obama’s Drawdown Disaster
In another brilliant commentary by Arnaud de Borchgrave, editor at large of The Washington Times and of United Press International—entitled, “Vietnam redux”—he has written:
See http://www.upi.com/Top_News/Analysis/de-Borchgrave/2011/06/29/Commentary-Vietnam-redux/UPI-65811309355176/; see also http://online.wsj.com/article/SB10001424052702303763404576416191709848746.html?mod=WSJ_hp_LEFTTopStories (“Al Qaeda Remains Top Threat to U.S.”) and http://www.usatoday.com/news/world/afghanistan/2011-07-04-petraeus-troop-drawdown_n.htm (“Obama’s plan was not among the range of options the military provided to him”)
He adds:
A truly brilliant article, as only de Borchgrave could have written, because of his vast experience with the Vietnam War and the lessons learned from it, as well as Afghanistan, Pakistan, Iraq and the Middle East in general, and the lessons to be learned from that region as well, and the tragedies that may be emerging.
Reason enough to make sure that Obama’s presidency ends no later than January of 2013, when he retreats either to Chicago or Hawaii to lick his political wounds and write his memoirs, and work full time on his presidency library!
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The Future Still Belongs To America
This is the title of an important Wall Street Journal article by Professor Walter Russell Mead—subtitled, “This century will throw challenges at everyone[, but the] U.S. is better positioned to adapt than China, Europe or the Arab world”—which states in pertinent part the following:
See http://www.naegele.com/documents/TheFutureStillBelongstoAmerica.pdf (bold emphasis added); see also https://naegeleblog.wordpress.com/2010/02/26/america-a-rich-tapestry-of-life (“America: A Rich Tapestry Of Life”)
The only thing on the horizon that might dampen the American future that Professor Mead has described is a nation-ending EMP Attack, which might kill all except for 30 million Americans, and end any future that we might envision.
Query whether we are totally and absolutely protected against such an attack, or whether America’s “prince of darkness”—and its consummate narcissistic demagogue, “Hamlet on the Potomac” and “Jimmy Carter-lite”—Barack Obama, is weakening our great nation’s military strength in ways that will dramatically change the course of history?
See https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/; see also https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/
. . .
In another important article entitled, “World power swings back to America”—and subtitled, “The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus”—the UK Telegraph‘s Ambrose Evans-Pritchard added:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html (emphasis added); see also http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10209822/US-shale-threatens-Saudi-funding-crisis-and-demise-of-OPEC.html (“US shale threatens Saudi funding crisis and demise of OPEC”)
It is noteworthy that Evans-Pritchard qualifies his predictions by saying that they will occur in “five years or so.” I concur that America has a very bright future ahead; however, this decade will be “dicey,” and it is difficult if not impossible to predict when there will be light at the end of the tunnel—or when the economic tsunami will have run its course and petered out. What we do know is that the Great Depression of the last century did not end until the onset of World War II, at the earliest; and this depression may last just as long.
Lastly, Russia will continue to be a pygmy when compared to the United States—in terms of America’s vibrant democracy, its growth, military power and economic strength, and all other indicia of global power. The same will be true, to a similar degree, with respect to China, although its future is much brighter than that of Russia.
See, e.g., http://www.dailymail.co.uk/news/article-2063117/U-S-Army-tests-hypersonic-weapon-travels-times-speed-sound–ANYWHERE-earth-30mins.html (“U.S. Army tests hypersonic weapon that travels five times the speed of sound… and can hit ANY target on earth in 30mins”)
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German Bail-Out Fatigue Turns To Fury, And The Greeks Are Being Sacrificed
In an important article by the UK Telegraph’s Ambrose Evans-Pritchard entitled, “Germany’s judges hold the euro’s fate in their hands”—and subtitled, “Whether or not Europe’s monetary union survives in its current form, shrinks to a Carolingian core, or shatters, depends as much on abstruse legal arguments put forward . . . in Germany’s constitutional court as it does on the parallel drama unfolding on Greek streets”—it is reported:
Evans-Pritchard added:
By way of background, Evans-Pritchard stated:
See http://www.telegraph.co.uk/finance/financialcrisis/8619241/Germanys-judges-hold-the-euros-fate-in-their-hands.html; see also http://www.guardian.co.uk/commentisfree/2011/jul/05/marshall-plan-europe-hesitant-leaders (“Any new Marshall plan will founder in the minds of Europe’s hesitant leaders”)
What is increasingly clear is that there will not be another Marshall Plan because the political consensus is not there. Also, the only truly strong country in Europe is Germany, which is in the process of turning inward as the political will to bail out Europe runs headlong into German nationalism. This is likely to increase, as the eurozone fractures.
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The Next, Worse Financial Crisis: Ten Reasons Why We Are Doomed To Repeat 2008
This fine Wall Street Journal article by Brett Arends can only be supplemented, not disparaged. It is not “Pollyannaish,” glossing over the warning signs on the horizon, like so many commentators who “sugar-coat” what is happening.
See http://www.marketwatch.com/story/the-next-worse-financial-crisis-2011-07-06
As far-fetched as it might seem at first blush, we have only seen the tip of an enormous iceberg, with much worse yet to come during the balance of this decade. Economic historians will be pouring over what has happened already, as well as what is to come, for many decades ahead, trying to determine what really happened.
As I wrote two and a half years ago in the American Banker, the daily newspaper of the banking industry:
See http://www.americanbanker.com/issues/173_212/-365185-1.html
Arends is correct: “No one has been punished”—not Greenspan, or anyone else. A federal official with reason to know told me that between 15-20 percent of the indictees in federal courts are probably innocent. Some are seniors who have been charged with cheating the Social Security program, and they are scared to death, so they agree to plea bargains rather than fight for their innocence. Yet, those who caused the suffering of millions of people globally have not been brought to justice, with much greater suffering to come.
See https://naegeleblog.wordpress.com/2011/01/03/the-american-legal-system-is-broken-can-it-be-fixed, n.8.
Echoing Arends’ conclusion that “those in the know” lose little—or nothing—if things go wrong, one should take time to read Bernie Madoff’s interview in New York Magazine, which concludes that the market is a whole rigged job, and there’s no chance that investors have in this market.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1464; see also http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele (“Greenspan’s legacy: more suffering to come”)
Arends is correct that the “referees” are corrupt too. I have been a lobbyist, and know how it works in spades.
See, e.g., https://naegeleblog.wordpress.com/2010/09/24/washington-is-sick-and-the-american-people-know-it (“Washington Is Sick And The American People Know It”) (see also the footnotes and comments beneath the article)
Most commentators point to “green shoots,” or signs that things might be improving, but there were green shoots during the Great Depression of the last century, which did not end until the onset of World War II, at the earliest. Twenty-to-forty years from now, economic historians will describe what we are going through now as the “Great Depression II,” or by using similar terms.
Hold on tight. Housing prices will fall by at least another 50 percent in the next five years or so; more loans will be “underwater, and homeowners will default and lose their homes; and banks and other lenders will be in even deeper troubled waters as their “toxic” loans increase, and their capital diminishes or evaporates.
As I wrote more than two years ago:
Last November’s elections saw Barack Obama and his Democrats suffer significant electoral losses, but they may pale in comparison with what happens next year.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1637 (“CNN Poll: Obama Approval Rating Drops As Fears Of Depression Rise”) (see also the article itself, as well as the footnotes and other comments beneath it); see also http://www.realclearpolitics.com/articles/2011/07/08/an_establishment_in_panic_110501.html (“An Establishment in Panic”)
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Treasury Secretary Geithner Echoes What This Blog Has Been Predicting!
In an article entitled, “Geithner says hard times to continue for many,” the AP has reported:
See http://news.yahoo.com/geithner-says-hard-times-continue-many-150523958.html
If anyone seriously believes that “Obama rescued the United States from a second Great Depression,” there is a bridge in Brooklyn that they might wish to buy. Despite the “spin” that Obama, Geithner and others are giving to economic issues, most Americans understand fully what is happening and who is to blame, which is why Obama will not be reelected next year.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1637 (“CNN Poll: Obama Approval Rating Drops As Fears Of Depression Rise”) (see also the article itself, as well as the footnotes and other comments beneath the article)
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More Government Shutdowns Are Coming
The UK’s Economist has an article about the government shutdowns in the State of Minnesota and elsewhere, which is worth reading.
See http://www.economist.com/node/18928883
What is crystal clear is that things will get worse, a whole lot worse, between now and the end of this decade. Indeed, many years from now, economic historians may refer to these times as the “lost decade” or the “Great Depression II,” or by using similar terms.
The closure of federal, State and local government facilities in the United States will become the norm. Included will be parks, more and more of which are closing now; museums and libraries; hospitals and other health care facilities; and schools and other educational facilities.
Courts will be closed, or operate on reduced schedules; and the list of “lights out” governmental entities will grow. Law enforcement will be terminated or “furloughed,” prisoners will be released, and crime will rise. Roads will go unpaved; and there will be a general breakdown and deterioration of America’s infrastructure.
See, e.g., http://www.usatoday.com/news/washington/story/2011-10-23/jobs-lost-economic-woes-hit-police-budgets/50885474/1?loc=interstitialskip (“Economic woes take toll on U.S. police departments”)
Government at all levels will be affected and have no choice, as tax revenues decline dramatically. Housing prices will fall by at least another 50 percent during the next five years or so, which means that property tax revenues will fall accordingly—unless government taxing entities refuse to reduce property valuations in a last-ditch attempt to maintain declining revenues. There will be “pitched battles,” in the courts and elsewhere, between the taxing authorities and the taxed; and more and more owners will have their properties seized to satisfy unpaid obligations.
Banks and other mortgage lenders are burdened today with staggering amounts of “toxic” and “underwater” loans, which are either on the lenders’ books already or the borrowers are poised to default in the days and months ahead and lose their properties. If the banks’ loan portfolios were “marked to market,” their net worths or capital might be negative now or fall precipitously. This will only get worse; and the bank regulatory agencies will be faced with the dilemma of whether to seize the “walking wounded” or allow them to operate and continue in existence, with their problems mounting each and every day.
In the United States and globally, meaningful and effective government solutions will be non-existent, and public outrage will be enormous and increasing exponentially. As I wrote more than two years ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html (“Euphoria or the Obama Depression?”)
Last November, Barack Obama and his Democrats suffered staggering electoral defeats in the United States. Next November, the consequences are likely to be even worse. Among other things, Obama might not be reelected; and if so, American economic issues may have proved to be decisive. Similar trends will be occurring in other countries.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1709 and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1637 (“CNN Poll: Obama Approval Rating Drops As Fears Of Depression Rise”) (see also the articles themselves, as well as the footnotes and other comments beneath them) and http://www.dailymail.co.uk/news/article-2021173/Americas-city-broken-dreams-50-jobless-destitute-people-set-forest-community-New-Yorks-doorstep.html#comments (“The Tent City of New Jersey: Desperate victims of the economic slump forced to live in makeshift homes in forest”)
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Will The Euro Crisis Will Give Germany The Empire It Has Always Dreamed Of?
This issue is discussed in an excellent and very sobering article by Peter Oborne, the UK Telegraph’s chief political commentator, which states in pertinent part as follows:
See http://blogs.telegraph.co.uk/news/peteroborne/100098260/this-crisis-will-give-germany-the-empire-its-always-dreamed-of/ (emphasis added); see also http://www.ft.com/intl/cms/s/0/c087c30e-b3be-11e0-855b-00144feabdc0.html#axzz1Smxa2CKN (“Athens’ ability to stay course in doubt”) and http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8653579/Europe-steps-up-to-the-plate.html (“Europe’s economic recovery is sputtering out”) and http://www.telegraph.co.uk/finance/financialcrisis/8656572/Eurozone-debt-crisis-Europes-politicians-will-be-punished-for-a-deal-dripping-with-moral-hazard.html (“At some point the Germans will realise that the package is a thinly-veiled fiscal union which makes the transfers they funnelled into East Germany look like small change, and they will revolt at the ballot boxes”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1702 (“German Bail-Out Fatigue Turns To Fury, And The Greeks Are Being Sacrificed”) and http://www.telegraph.co.uk/finance/financialcrisis/8728628/Euro-bail-out-in-doubt-as-hysteria-sweeps-Germany.html (“Euro bail-out in doubt as ‘hysteria’ sweeps Germany”—”The next month will decide [German Chancellor Angela Merkel’s] future, Germany’s destiny, and the fate of monetary union”)
. . .
There are those who preach the tenets of creating a global government; and they maintain that the constitution of a new world order is essential to maintain democracy. Also, they contend that the regulation of the economy by a global financial institution can be a solution to the financial crisis that began in 2007, and such an institution would be a first step towards the creation of a global government, of which the European Union is an illustration.
Barack Obama agrees with this; and it is among the many reasons why he must not be reelected next year. Indeed, he will “retreat” either to Chicago or Hawaii no later than January of 2013, to lick his political wounds and write his memoirs, and work full time on his golf scores and his presidential library.
“Global governance” is pure and utter nonsense. Indeed, lots of Americans would gladly get rid of the UN, and ship it to France or elsewhere in Europe, and let the French or other Europeans pay for it. Global governance is “Mary Poppins-esque” and/or “Alice in Wonderland-esque.”
Americans do not want Germany or France participating in the governance of anything relating to the United States, any more than Hitler’s Germany should have done it. This is among the reasons why World War II was fought by the United States. America’s history abhors “meddling” in our affairs, which is exactly what global governance entails, and much much more. A majority of Americans might be willing to give up their lives fighting to insure that this never happens.
France did not win World War II. Americans saved Frenchmen from “enslavement” by the Germans. But for the United States, the French might be speaking German today as their “native” tongue. Indeed, a German-American—Dwight David Eisenhower—destroyed Hitler and his monstrous “Thousand-Year Reich.” France did not do it. France was flat on its pathetic back.
The United States has real enemies in this world today, who want to destroy us (e.g., China’s military, Putin and his Stalinist thugs in Russia, North Korea, Islamic fascists). We cannot rely on France or Europe to defend us—militarily, economically or in any other way. Indeed, France and Germany are perhaps the last countries in the world to preach to the United States about democracy. Americans have given their lives for it. France has only “talked” about it.
Lastly, Americans are not about to trust their survival, the survival and national security of our great country, and our freedoms and democracy to France or Germany, two countries that lost World War II.
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I agree with your last paragraph in its entirety, how I wish the people of the UK would adopt this principle, we are governed by at best sexual deviants of the middle of the road sort, now that in itself is not so bad however it does lead to weakness in making decisions, there is nothing clearcut about liberalism, liberalism or any sort of leftward leaning will not help us in the events about to overtake us.
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China’s Spectacular Real Estate Bubble Is About To Go Pop
In an article whose title is set forth above, Jeremy Warner—assistant editor of the UK’s Telegraph and one of Britain’s leading business and economics commentators—has written:
See http://blogs.telegraph.co.uk/finance/jeremywarner/100011023/chinas-spectacular-real-estate-bubble-is-about-to-go-pop (emphasis added); see also https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/#comment-1639 (“The Great Property Bubble of China May Be Popping“) and http://www.telegraph.co.uk/finance/china-business/8900271/China-property-raises-concerns-as-prices-continue-to-slide.html (“China property raises concerns as prices continue to slide”)
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I have been saying for the last few years that the dramatic rise in China’s property cannot sustain. This is from ground level observation. A 50 sq. m. apartment in a 1970-era building within the second ring of Beijing is going for roughtly $100000 (RMB 700000). That same property was sold for about RMB 15000 ~ 20000 in the early 1990s. With $100000 you can buy a bigger apartment in downtown Miami and it will be higher quality. People in the U. S. make much more money per capita, whereas the salary of a normal worker is anywhere from 1200 to 3000 Yuan per month. The wage / property ratio is out of control, like in Southern California during the housing bubble, to a different degree. Unfortunately, the psychology behind property bubbles is very similar everywhere in the world.
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Stocks, Real Estate Will Collapse And Keep Falling Into 2013
This prediction by James Fitzgibbon, director of the Highlander Fund, is totally consistent with—albeit more timid and conservative than—what I said in the article above (and in my footnotes and comments beneath it) and in other articles, and in an interview that I gave in October of 2009.
See http://www.dickmorris.com/blog/the-real-economic-story/#more-3883; see also http://www.americanbanker.com/issues/173_212/-365185-1.html (“Greenspan’s Fingerprints All Over Enduring Mess”) and http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html (“Euphoria or the Obama Depression?”) and http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele (Interview with Timothy D. Naegele: “Greenspan’s legacy: more suffering to come”) and http://www.msnbc.msn.com/id/44370462/ns/business/ (“First time since 1945 that government has reported net monthly job change of zero”)
In an article by political pundit and former Bill Clinton adviser, Dick Morris, he added:
Hold on tight. The worst is yet to come, by far, during the balance of this decade. As I have written, we are in the midst of the “Great Depression II,” which economic historians will describe as such—or by using similar terms—20-40 years from now.
Yes, there will be “green shoots” from time to time, or signs that things are improving. This was true during the Great Depression of the last century as well, which did not end until the onset of World War II at the earliest.
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I am wondering, is there anyone out there who isn’t on needles and pins as this economic crisis continues to unfold???? You and the articles presented here bring up many poignant economic reasons of why we are in this situation today.
I believe most people don’t understand the theories and rules of economics, nor do they wish to. What they do understand though is really quite simple and certainly applies to the US or any other country. That is when anyone spends more than he has, or takes in, debt mounts; and due to everyday events, this makes it terribly hard to “catch up” and pay back the amount owed, with that awful interest hovering above and causing much, much, much higher debt. It is daunting and each person reaches a point where they cannot go on if there is no feasible way to meet the debt and also live. So then Bankruptcy occurs. Applying this to a country or countries is the only way I understand what a terrible fix we are in.
As far as I know there remains approximately 3 trillion dollars that Americans are hanging on to. They see no reason to invest in business because of the uncertainty due to unknown taxes, unknown medical costs and regulations the government can and will tag on them as they “do business.” Now who in the world would want to stick his neck out, open a business and employ others when so much uncertainty looms? Guess it is better to hold on to the money and not just give it away to the government. Small businesses have made this country prosper. Unfortunately the opportunity for Capitalism is not presently available in the US.
I feel we never got out of the recession of 2008,,,,,,,,,,,,,,,and are now headed to the big D. Your predictions may very soon be on our doorsteps. I’m just waiting to hear city after city declare hardship cases. Michigan alone lost 75 million dollars today that was federally generated to the colleges for food stamps for students……………..Can you believe that much money was appropriated to students??? Whatever happened to having a job while working one’s way through school?
Just my thoughts on this awful, sickening economic disaster we are in. I won’t even comment on the President!!!!!!!!!!!!!!!!!!!!! My nerves are already out of control.
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Thank you, Mary, for your thoughtful comments.
Yes, we are headed for far worse during the balance of this decade, dissimilar to anything we have witnessed in our lifetimes. Not a pretty picture, domestically or globally; and it is very unlikely that Barack Obama will be reelected.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ (see also the footnotes and comments beneath the article)
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why should we be on “needles and pins” – I mean none of us mortals can control the mess so why should we get excited so much? The mess is on system level and thus affecting all. The unfairness of it is that it will provide brilliant opportunity to get rich or richer for some small minority and pain and suffering for everybody else. OC we may be mistaken but signs are all there for everybody to see. There have been for some time….
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Thank you for your comments. There is wisdom in what you say.
Yes, of course, there is no way that any of us can control or influence the global economic “mess.” Indeed, the politicians in the United States, Germany and elsewhere—many of whom are raving narcissists and demagogues—are apt to make things worse, a whole lot worse.
For example, Barack Obama pushed the enactment of his so-called “Stimulus Package,” which was fashioned not in the White House as such keystone legislative packages usually are, but by former House Speaker Nancy Pelosi and her Democratic colleagues to please their constituencies. The Republicans were effectively precluded from participating in the legislative process.
The net result is that the legislative package failed to stimulate the U.S. economy at all, and instead rewarded the Democrats’ faithful and added mightily to the American debt, which is causing so many problems today. As I have written:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
We are seeing that now; however, the rising anger in America, the UK and elsewhere is only the tip of an enormous iceberg, which will rear its ugly head between now and the end of this decade, with a vengeance.
You are correct when you add:
I have noted this before.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1548 (“While Most Of America Is Hurting Economically, The Super-Rich Are Richer Than Ever”)
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Serving On A Board Of Directors Can Be A Thankless And Brutal Experience
USA Today has reported about the political infighting and rifts within the board of directors at the acclaimed Betty Ford Center for the treatment of drug and alcohol addiction in Rancho Mirage, California.
The former First Lady’s daughter was ousted from her leadership position with the board, and resigned entirely; financial support has stopped from some of the Center’s long-time contributors; the former First Lady’s wishes for the Center’s future are being disputed; and chaos seems to be engulfing the organization as its competitors broaden their reach geographically, and as the national economy falters. None of this bodes well for the Center’s future.
See http://www.usatoday.com/news/nation/2011-08-14-betty-ford-treatment-center-funding_n.htm and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/ (see also the footnotes and comments beneath the article)
Having served on several boards of directors, I vowed that I would never serve on another one. The “cat-fighting” and internal politics often make the most Machiavellian politics of Washington, D.C. seem like child’s play.
Egos and factions and power grabs seem to be the norm. Indeed, often the boards members are more interested in their power and positions, and the perks of being board members, than they are in advancing the worthy goals of the organization.
Many of us have found that it is a thankless job. More importantly, for those who serve on the boards of financial institutions and other large organizations, legal liability can attach to their decisions; and this alone can be brutal unless there are Directors and Officers Liability Insurance (“D&O”) policies in place that provide adequate coverage against costly litigation.
If asked today by a client about serving on a board, my gut reaction would be “no, don’t do it,” which is sad.
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Why Aren’t Homes Selling?
The answer is at least six-fold:
These are also among the many reasons why Barack Obama will not be reelected. The chickens are coming home to roost; and lots more Americans will lose their homes and suffer greatly, which will be true of those abroad as well.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/ (“The Economic Tsunami Continues Its Relentless And Unforgiving Advance Globally”) and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ (“Barack Obama Is A Lame-Duck President Who Will Not Be Reelected”) (see also the footnotes and comments beneath both articles)
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A Series Of Anni Horribiles, Or Disastrous Years, Will Stretch Well Into This Decade
In another brilliant commentary by Arnaud de Borchgrave, editor at large of The Washington Times and of United Press International—entitled, “New world disorder”—he has written:
See http://www.upi.com/Top_News/Analysis/de-Borchgrave/2011/08/22/Commentary-New-world-disorder/UPI-22821314015006/
I respectfully disagree with de Borchgrave that the “global receding tide” will crest by 2013. This is wishful thinking.
The Middle East will get worse, and the promises of the “Arab Spring” and the “Scent of Jasmine” will seem long forgotten. Indeed, we may wish that we had the relative stability of the past again; and even Israel may be “engulfed.”
As for a world of predator “beasts” replacing the military as we know it, perhaps the “Brave New World” is coming—and I love the notion of robotic drones, submarines and the like—however, something tells me that “ground forces” and navies (with manned ships) and piloted planes will not become obsolete.
Education is shifting to the Web, and “bricks and mortar” colleges and graduate schools may be obsolete too, sometime in the future.
See https://naegeleblog.wordpress.com/2011/07/29/are-colleges-dinosaurs/
Lastly, Obama does not have a clue, and is history. The handwriting is on the wall.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ (“Barack Obama Is A Lame-Duck President Who Will Not Be Reelected”) (see also the footnotes and all of the comments beneath the article)
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European Banks Face Collapse Under Debts, Warns Deutsche Bank Chief
This is the title of an article in the UK’s Telegraph, which comments on the warnings of Josef Ackermann, the chief executive of Deutsche Bank, Germany’s biggest bank. He has warned that “numerous” European lenders would collapse if they were forced to book their losses on stricken sovereign bonds:
See http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8742919/European-banks-face-collapse-under-debts-warns-Deutsche-Bank-chief-Josef-Ackermann.html
Of course EU banks face the prospect of collapse, and the same thing is true of American and other banks around the world. There is no mystery about this. Only someone who has no knowledge of economics fails to understand that this is true.
In accounting principles relating to financial institutions, there is the concept of “marking assets to market”—which can become a requirement or imperative. In the case of home mortgages, this means that if the face amount of a loan is greater than the market value of the home, the loan is “underwater” and the books (or balance sheet) of the bank should reflect this fact. In the absence of doing so, the bank’s assets are overstated (and distorted), and a false sense of well-being is conveyed to depositors, investors and the public alike.
American banks hold massive amounts of “toxic loans” today—or those that are non-performing or under-performing. Housing prices are expected to fall by at least another 50 percent in the next five years or so, which means that more and more loans will go into default or foreclosure. When this happens, the amount of toxic loans will grow dramatically; and if mark-to-market accounting rules were applied, this situation would become even more dire.
Applied to countries that hold sovereign bonds or other debt, the same principles govern. Small banks will be overwhelmed in the EU, the United States and globally. What this article fails to add is that things will get worse economically between now and the end of this decade; and that governments do not have any answers, because they are part of the problem.
Hold on tight. The worst is yet to come, far worse; and bank recapitalizations will be like adding small amounts of water to a pond.
See also http://www.nytimes.com/2011/09/07/business/global/in-euro-zone-banking-fear-feeds-on-itself.html?_r=1 (“In Euro Zone, Banking Fear Feeds on Itself”)
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The Bottom Will Drop Out Of The American Real Estate Market
In a sobering USA Today article entitled, “Rich and famous are mere mortals in soft real estate market,” it is stated:
See http://www.usatoday.com/money/economy/housing/story/2011-09-29/celebrity-house-sale/50609948/1
American housing prices will fall by at least another 50 percent in the next five years or so. The only possible exceptions to this will be in markets where international investors might make a difference.
We are in the midst of the “Great Depression II,” which economic historians will describe as such (or by using similar terms) 20-40 years from now. Things will get far worse during the balance of this decade.
Yes, there will be “green shoots” from time to time, or signs that things are getting better, but that was true during the Great Depression of the last century as well, which did not end until the onset of World War II, at the earliest.
When housing prices finally hit “bottom,” there will be bargains galore for those who have waited patiently on the sidelines with cash. Indeed, cash will be king!
Other Americans will suffer greatly, and lose everything material.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1817 (“A Series Of Anni Horribiles, Or Disastrous Years, Will Stretch Well Into This Decade”)
Lastly, USA Today had an article some time ago about the most over-priced communities in the United States, and that honor went to Santa Barbara, California—”the nation’s most out-of-whack market.” One can expect its real estate prices to be hit disproportionately over the next five years or so, as the bottom drops out, which is virtually a certainty.
See http://www.usatoday.com/money/economy/housing/2005-08-16-home-prices-usat_x.htm; see also http://www.bankrate.com/finance/real-estate/beach-towns-bargain-home-prices.aspx?ec_id=m1117367#slide=5 (Santa Barbara: “Foreclosures as a percentage of all sales: 46.78%”)
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Interesting information. I suspect most of us reading or taking a few minutes to reply to this cannot fathom what it is like to live in a palatial dwelling, getting lost within it, and then wanting to sell it. The Celebs who own, buy and sell their properties have gotten the means from us, the middle class, who continue to support them. I’ve given up going to the movies for various reasons; and after reading this, I am so glad that I have. Yes, in our Capitalist nation, they have earned their wealth, but it seems so disconcerting the way they use it to the point of, in my opinion, squandering it. Am I jealous? I hope not. Just thinking about having the means to buy a double-wide out in sunny California and enjoying every feature of it………………..especially ownership and privacy. We learned in elementary school about “wants and needs”—so be it.
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Economists: Consumers Won’t Save The Economy—Or Stop The Depression
While many economists are “whores,” who are far worse at predicting the future than weathermen (and women)—in terms of accuracy—USA Today notes, in an article that is essentially correct:
See http://www.usatoday.com/money/economy/story/2011-10-02/cnbc-consumers-economy/50619276/1
Consumer spending, which has been the engine of American growth in the past, will not lead the way during the next five years or so, and perhaps during the balance of this decade or longer.
The net worths of many American families have been decimated because of the decline in the values of their homes, and by the loss of such houses altogether in the case of many. Consumer spending had been fueled by a false sense of economic well-being, as housing prices soared and as more Americans borrowed heavily and spent like “drunken sailors.”
American housing prices will fall by at least another 50 percent in the next five years or so; and more Americans will lose their homes to foreclosure, or simply walk away from them, which will impact consumer spending even more dramatically. For the fortunate few who are able to sit patiently on the sidelines with cash, there will be bargains galore when the “bottom” is reached finally. Cash will be king!
For those Americans and their counterparts globally who have lost everything, it will be an economic depression and a living nightmare. Indeed, 20-40 years from now, economic historians will characterize this period as the “Great Depression II,” or by using similar terms. For these Americans, their materialistic dreams will be long gone.
Yes, there will be “green shoots” from time to time, or signs that the economy is improving, which was true during the Great Depression of the last century as well. However, that depression did not end until the onset of World War II, at the earliest; and this one may last just as long.
Hold on tight. Things will get very ugly between now and the end of this decade. There are no governmental solutions to these problems; and the human suffering will be staggering. Also, as I have written in the past:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
In last November’s elections, Barack Obama and his Democrats suffered enormous political defeats, which may pale in magnitude when compared to what is coming next November!
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1843 (see also the article itself, as well as the footnotes and all of the comments beneath it)
. . .
In another article entitled, “Protectionism beckons as leaders push world into Depression”—and subtitled, “The world savings rate has surpassed its modern-era high of 24pc. This is the killer in the global system. It is why we are at imminent risk of tipping into a second, deeper leg of intractable depression”—the UK Telegraph‘s Ambrose Evans-Pritchard added:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8802462/Protectionism-beckons-as-leaders-push-world-into-Depression.html; see also http://www.cnbc.com/id/44758520 (“Greece Falls Into ‘Death Spiral’: Rising Debt, No Growth”) and http://abcnews.go.com/Business/wireStory/bernanke-economic-recovery-close-faltering-14663873 (“Bernanke Says Economic Recovery Close to Faltering”)
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The World Is Facing The Worst Financial Crisis In History
Of course Sir Mervyn King, Governor of the Bank of England, is correct in reaching this conclusion. Indeed, his views echo my comments in the article above, and in all of the comments beneath it. An article in the UK’s Telegraph quotes the Governor as stating:
See http://www.telegraph.co.uk/finance/financialcrisis/8812260/World-facing-worst-financial-crisis-in-history-Bank-of-England-Governor-says.html
As I have stated repeatedly, there is nothing that governments in the United States, the UK or elsewhere can do to thwart the economic tsunami from rolling worldwide, with unprecedented human suffering, lasting at least until the end of this decade.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1850 (“Economists: Consumers Won’t Save The Economy—Or Stop The Depression”) (see also the article itself, as well as the footnotes and all of the comments beneath it) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1848 (“The Bottom Will Drop Out Of The American Real Estate Market”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1828 (“European Banks Face Collapse Under Debts, Warns Deutsche Bank Chief”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1817 (“A Series Of Anni Horribiles, Or Disastrous Years, Will Stretch Well Into This Decade”)
. . .
In another very sobering article, the Telegraph added:
See http://www.telegraph.co.uk/comment/telegraph-view/8813441/An-entire-system-of-global-trade-is-at-risk.html
This echoes my conclusions more than two years ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
Not only are Americans realizing that their politicians do not have the answers, but their counterparts in Europe and globally are realizing this as well. Barack Obama and his Democrats will not be reelected next November; and a similar fate may befall other politicians worldwide.
See https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ (“Barack Obama Is A Lame-Duck President Who Will Not Be Reelected”) (see also the footnotes and all of the comments beneath the article)
Anger is growing globally, which is apt to reach unprecedented levels before the end of this decade. The economic tsunami will run its course toward the end of the decade; and there are no governmental solutions to these problems.
Hold on tight. The worst is yet to come, and it will be very ugly!
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Where And Why Keynes Went Wrong
The RAND Corporation has an interesting article that discusses Keynesian economics—in the context of Barack Obama’s failed and wasteful so-called “stimulus package,” and discusses why it failed—which is worth reading.
See http://www.rand.org/commentary/2011/11/07/WS.html
First, one must appreciate fully that Obama understands little or nothing about economics and business; and in both respects, he is a fool and a feckless naïf, and a tragic Shakespearean figure who will be forgotten and consigned to the dustheap of history—unless he tragically alters the course of American history.
See, e.g., https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/ and https://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/ (“[I]n New York City before he moved to Chicago for the first time, he went to work as a research assistant at a consulting house to multinational corporations, where he recalled feeling like ‘a spy behind enemy lines'”)
He is America’s “Hamlet on the Potomac” and “Jimmy Carter-lite.” His naïveté is matched by his overarching narcissism; and he is more starry-eyed and “dangerous” than Jimmy Carter. When the stimulus package was be devised, then-House Speaker Nancy Pelosi and her Democrats were given the task of fashioning it, which they did to satisfy their constituents, regardless of whether the rest of America benefited or was hurt.
The RAND article notes:
Aside from the fact that the stimulus packages were politically contrived instead of being economically sound, they added to America’s debt burdens and created additional uncertainties, which produced negative effects on the U.S. economy. In short, they were wasteful, unmitigated disasters, which are among the many reasons why Obama will not be reelected next year, but will return either to Chicago or Hawaii no later than January of 2013, to lick his political wounds and write his memoirs, and work full time on his presidential library.
It cannot happen fast enough for the good of the United States and the American people!
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U.S. Companies Feel The Impact Of Europe’s Financial Mess
This is the title of an Associated Press article, which stated:
See http://www.usatoday.com/money/economy/story/2011-11-19/europe-crisis-affects-us-businesses/51300498/1?loc=interstitialskip
This article is sobering but accurate. The worst is yet to come, by far, during the balance of this decade!
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1859 (“The World Is Facing The Worst Financial Crisis In History”) (see also the article itself, as well as the footnotes and all other comments beneath it)
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The Euro Zone Is Collapsing
Perhaps it will not happen in a instant, and maybe there will be sporadic signs of relief in the future. However, it is inevitable, and just a matter of time. The calamity will rock the world.
The UK’s Economist, in a conservative, sobering article that must be read between the lines—which is subtitled, “The crisis in the euro area is turning into a panic. . . . The risk that the currency disintegrates within weeks is alarmingly high”—has noted:
See http://www.economist.com/node/21540259 (“Beware of falling masonry”)
Again, as written above: “The World Is Facing The Worst Financial Crisis In History.” Things will get very ugly during the balance of this decade!
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1859; see also http://www.cnbc.com/id/45435459 (“Dow, S&P Log Worst Thanksgiving Week Since 1932”) and http://www.nytimes.com/2011/11/26/business/global/banks-fear-breakup-of-the-euro-zone.html (“Banks Build Contingency for Breakup of the Euro”)
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The Fed Must Not Save Europe From Disaster
If the Fed seeks to do so, all of its governors must be investigated by Congress, removed from office, indicted and imprisoned. They would be gambling with the monies of the American people, and no less drastic measures would be required.
They are unelected and believe they are unaccountable; and they must be taught otherwise, for the good of the United States and the American people. They did this before, and they must be stopped from doing it ever again.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1544 and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1126
It must never be forgotten that Alan Greenspan is directly responsible for and triggered the economic calamity that global economies are facing today, as well as what Americans are living through. As I wrote more than two and a half years ago in the American Banker, the daily newspaper of the banking industry:
See http://www.americanbanker.com/issues/173_212/-365185-1.html
No one has been punished—not Greenspan, or anyone else. This must change, and it should start with Greenspan. In another time and country, he would have been tried, convicted and executed by now.
As Ambrose Evans-Pritchard has written in the UK’s Telegraph:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8918784/Should-the-Fed-save-Europe-from-disaster.html (“Should the Fed save Europe from disaster?”)
As I have written, it is clear that the euro zone is collapsing. Neither the United States nor the Fed should do anything to prevent this from happening. Sooner or later an equilibrium or “bottom” will be reached, and then recovery can begin again. Until this happens, governments can do nothing except risk and waste finite and precious resources trying to prevent it—like futile attempts to plug up holes in a dam that is breaking or leaking like a sieve.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1901; see also http://www.reuters.com/article/2011/12/04/us-eurozone-imf-fed-idUSTRE7B30X320111204 (“Fed may give loans to IMF to help euro zone: paper”)
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fascinating and thoroughly insightful//….if not altogether shocking and frightening. This is not a period of time to employ Ostrich Management techniques. I’d better get busy streamlining/.
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Euro Doomed From The Start, Says Architect Of The Single Currency
In an important UK Telegraph article—which is subtitled, “The euro project was flawed from the start and the current generation of European leaders has failed to address its fundamental problems, Jacques Delors, the architect of the single currency, declares today”—it is stated:
See http://www.telegraph.co.uk/finance/financialcrisis/8932647/Euro-doomed-from-start-says-Jacques-Delors.html; see also http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8964183/Workers-of-Europe-unite-youve-only-euro-chains-to-lose.html (“The echoes of the 1930s are loud, and will become louder as combined monetary and fiscal contraction entrench depression“) and http://www.economist.com/node/21552250 (“Currency disunion: Why Europe’s leaders should think the unthinkable“)
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The Demise Of The Monetary Union
In an article entitled, “Britain, the IMF, and the world’s richest beggar,” the UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, has written:
See http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013884/britain-the-imf-and-the-worlds-richest-beggar/
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2012 Could Be The Year Germany Lets The Euro Die
This is the title of another article by the UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, which states:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8987846/Ambrose-Evans-Pritchard-2012-could-be-the-year-Germany-lets-the-euro-die.html; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1907 (“Euro Doomed From The Start, Says Architect Of The Single Currency”)
Hold on tight. The worst is yet to come, by far!
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Global Economy Could Endure Disaster For a Week
This is the title of a disturbing Reuters article, which states in pertinent part:
See http://www.cnbc.com/id/45899109
The ultimate “disruption,” of course, would be a nation-ending EMP Attack!
See https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/ (“EMP Attack: Only 30 Million Americans Survive”)
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Fed Members Laughed As Housing Bubble Grew
This is the title of a CNBC article, which is worth reading.
See http://www.cnbc.com/id/46194541
It is totally consistent with an article that I wrote for the American Banker, the daily newspaper of the U.S. banking industry, which was published on October 17, 2008, and entitled, “Greenspan’s Fingerprints All Over Enduring Mess.” In it, I wrote:
See http://www.americanbanker.com/issues/173_212/-365185-1.html
The chickens are still coming home to roost—long after the laughter ceased at the Fed—which will be true during the balance of this decade, in the United States and globally.
See, e.g., http://www.zerohedge.com/news/record-12-million-people-fall-out-labor-force-one-month-labor-force-participation-rate-tumbles- (“Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low“)
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America’s $25 Billion Pseudo-Foreclosure-Scandal Settlement Rewards Homeowners Who Gambled And Overextended Themselves
There are three articles on this subject that are worth reading: one in the Wall Street Journal, another at Bloomberg.com, and a third in the UK’s Economist.
See http://www.naegele.com/documents/ReviewandOutlook-25BillionBankJob.pdf and http://www.bloomberg.com/news/2012-02-09/foreclosure-deal-to-spur-new-wave-of-u-s-home-seizures-help-heal-market.html and http://www.economist.com/blogs/schumpeter/2012/02/americas-mortgage-settlement
As the Journal article states:
The words “a pseudo-foreclosure scandal” should be highlighted and underscored. Why should homeowners who overextended themselves be bailed out or rewarded at all? They gambled and lost. It is a scam by our government, once again.
The rosy scenario painted by this article, of how homeowners might be helped, could have been written at the Obama White House. For a much better and more accurate assessment, one should read the Bloomberg article, which states in pertinent part as follows:
The Economist added:
Unlike the RTC that came into being during the S&L crisis of the 1980’s and early 1990’s, and then went out of business, this monstrosity may stay with us . . . like ObamaCare. Indeed, Barack Obama’s demagoguery knows no bounds when he asserts that the actions of banks and other related institutions caused 4 million Americans to lose their homes to foreclosures. The banks and other lenders did not force borrowers to go into debt beyond their means and what they could afford. This is utter nonsense, a lie, and patently absurd.
To get rid of Barack Obama no later than January of 2013—and send him packing either to Chicago or Hawaii to lick his political wounds and write his memoirs, and work full time on his presidential library—will give the next president and his administration an opportunity to end all of this.
Having represented upwards of 200 banks, financial institutions and similar entities, I would recommend that no new mortgage loans should be made, inter alia, because of economic uncertainties during the balance of this decade and falling housing prices during at least the next five years. In fact, this is exactly what many of these institutions are doing.
No wonder American voters do not trust their politicians, much less those in Washington.
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Greece Is The Tip Of An Enormous Iceberg
This is essentially the conclusion of the UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, who has written:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9077586/Germanys-Carthaginian-terms-for-Greece.html; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1956 (“2012 Could Be The Year Germany Lets The Euro Die”)
Similarly, American billionaire George Soros has warned that German Chancellor Angela Merkel’s policies could lead to a repeat of the Great Depression:
See http://www.breitbart.com/article.php?id=CNG.61735980a95dfd8997479bc085148e34.81&show_article=1 (“Merkel taking Europe in wrong direction: Soros”)
Hold on tight. Europe, including Germany, will be descending into chaos. It is merely a function of time before this happens.
. . .
Indeed, Orthodox primate Hieronymos II warned in a letter to Greece’s prime minister, which is quoted in the UK’s Telegraph:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9091837/Can-a-return-to-the-drachma-save-Greece-as-unemployment-soars.html (“No Greek bank has been able to issue a letter of credit accepted anywhere in the world since November” . . . “Germany may even leave the euro”)
This echoes what I wrote almost three years ago—or worse:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
The Telegraph article concluded:
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George Soros helped all this financial disaster happen by putting Obama in the white house. Let the big greedy banks fail. Stop giving them the taxpayers money. Bush was bad. Obama is worse. Bank of NY Mellon made $2.4 billion in U.S pre-tax income in 2010 and received a $670 million federal tax refund. Wow, can someone explain how this is legal??? Together Bush and Obama gave $7.77 TRILLION to the banks. There is something so wrong with this picture. Put the robber barrons in jail. Don’t give them taxpayer money.
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Thank you, Dolora, for your comments.
First, I am not a fan of George Soros.
Second, the separation of commercial banking and investment banking (e.g., formerly known as “stockbrokers”) took place after Congress repealed the Glass–Steagall Act. It never should have happened; and if Paul Volcker had remained as Chairman of the Fed, I do not believe it would have happened. You might wish to read my comments on this subject.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1573 (“The Times Ahead Do Not Look Pretty”) (see also the article itself, as well as the footnotes and all of the other comments beneath it)
Third, I have represented upwards of 200 banks and other financial institutions, and have dealt with their CEOs and top management. They are very conservative, by and large. On the other hand, “investment bankers” are essentially gamblers, which is why commercial banking and investment banking do not (or should not) mix.
Fourth, lots of banks should have been allowed to fail, and many have already. The Government should have set up an entity like the RTC, which was used to solve the problems of the Savings and Loan industry, when lots of these institutions failed in the 1980s and early 1990s.
See, e.g., http://en.wikipedia.org/wiki/Resolution_Trust_Corporation
Fifth, there is plenty of blame to go around; and yes, the losses have been staggering. I do not believe GM or Chrysler should have been bailed out either, but the unions (e.g., the UAW) demanded it; and Obama gave in to them.
Lastly, I do not believe taxpayer money should be given away, or wasted. Too many people have worked too hard for that to happen, period.
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Plan For An Economic 9/11
This is the dire warning contained in a UK Daily Mail article, from analysts who urge Americans to buy guns and gold, and who predict a market crash and street riots within a year.
See http://www.dailymail.co.uk/news/article-2107315/Market-crash-street-riots-year-Americans-plan-economic-9-11.html
The possibility of this has been implicit in my writings and comments above, and earlier.
See http://www.americanbanker.com/issues/173_212/-365185-1.html and http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele
For example, as I wrote almost three years ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
A subtitle of the Daily Mail article is: “[A]nalysts say Americans will riot when another Great Depression hits.” Yet, it has hit already, for millions of Americans. The article adds:
Apart from chaos and anarchy—even worse than we have been witnessing in Greece already—the real risk is not a run on the FDIC-insured U.S. banks, but a run on those uninsured mutual funds and other investment vehicles that are invested in stocks, creating a liquidity crisis of epic proportions. When they fall, the thud will be heard around the world; and the house of cards will fall like dominos.
See also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2177 (“The Risk Of Runs Is Real”)
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Unmired At Last?
This is the conclusion of the UK Economist‘s staff who have clearly hedged their bets and wisely so, when writing about the American economy in a fine article—subtitled, “America’s recovery is neither robust nor dramatic. But it is real”—which is worth reading.
See http://www.economist.com/node/21550256
However, it misses the bigger picture.
First, one must realize that economists are like lemmings marching in lock step to the sea. They were wrong about predicting what happened in 2008, and thereafter; and they are wrong now too. Twenty-to-thirty years from now, economic historians—who at least have some credibility in describing the past—will characterize this period as the “Great Depression II,” or by using similar terms.
Like the Great Depression of the last century, this one will not end until late in this decade, or longer. Yes, there are “green shoots” or signs that things are improving, but they were present during the last depression too, which did not end until the onset of World War II, at the earliest.
Second, the United States is resilient and will fare better than other parts of the world, such as Europe; however, it will be hurt badly in the process too. Large numbers of Americans are suffering now, which will only increase dramatically. Real estate prices will fall another 50 percent in the next five years or so; and more and more Americans will lose their homes and everything else. It will not be a pretty picture; and there is nothing that governments can do to prevent it.
Indeed, Narcissistic demagogic politicians on both sides of the Atlantic will pontificate, but their words will fall increasingly on deaf ears. The people do not believe them anymore, and with good reason; and this will only get far worse. Most have no training whatsoever in economics; and they simply fashion their messages based on what they believe their constituents want to hear, which does nothing to solve the underlying economic problems.
Third, when the economic tsunami was unleashed—like a pebble thrown into a pond—the ripples and ultimately the waves have spread far and wide; and they are not remotely close to running their course. Man is unable to hold back a tsunami in the oceans; and the same is true of the economic tsunami that has been wreaking havoc around the world.
Fourth, there is a vast disparity in global wealth. One simply has to view the mega-mansions being built, and the megayachts plying the waters of the world, to realize fully that the common man’s plight has no relationship to the vast wealth of many. This may give rise to security issues for the wealthy that are unprecedented, as class warfare reaches new and potentially-dangerous levels. Conspicuous consumption may become a curse rather than a goal.
Only time will tell whether it is wise to plan for an “economic 9/11,” which may be coming.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2024 (see also the article itself, as well as the footnotes and other comments beneath it)
Lastly, the reason why property tax revenues have been declining more slowly is because local governments have refused to adjust property values downward to reflect actual market conditions, which may give rise to a taxpayer revolt unto itself and/or exacerbate the loss of homes to foreclosure. Also, if Israel’s reckless Netanyahu has his way, war will Iran will begin later this year, which will make somewhat-rosy economic predictions seem like enormous fantasies.
See, e.g., https://naegeleblog.wordpress.com/2010/02/20/israels-senseless-killings-and-war-with-iran/#comment-2066 (see also the article itself, as well as the footnotes and other comments beneath it)
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The Euro’s Days Are Numbered
In an important article that is worth reading, the UK’s Economist noted:
See http://www.economist.com/node/21552250 (“Currency disunion: Why Europe’s leaders should think the unthinkable“) (emphasis added)
However, the present turmoil was foreseen; and one of its architects believes the euro was doomed from the start.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1907 (“Euro Doomed From The Start, Says Architect Of The Single Currency”)
Now the issue seems to be: how to arrange a relatively-amicable “divorce,” at a very precarious time in history, globally, when this and other events might send economies around the world into an even more rapid tailspin. Indeed, the rest of this decade is fraught with dangers, and may be ugly—at the very least economically.
See also http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9184373/Wolfson-gurus-see-euro-break-up-as-dangerous-but-liberating.html (“A disorderly break-up of the euro would set off a cataclysmic chain-reaction and a collapse of Europe’s banking system, pushing the world into full-blown depression“)
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Obama’s Latest Scheme To Bail Out Gamblers And Distort Markets
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, should be fired—but it will not happen because he mirrors the views of Barack Obama and his totally-failed presidency.
Donovan believes the federal government has a “legal responsibility” to approve loan modifications for certain homeowners, which of course is patently absurd—unless those homeowners are Obama’s constituents whom he wants to reward (or promise to reward) before November’s elections.
The Wall Street Journal has reported:
See http://blogs.wsj.com/developments/2012/04/06/hud-secretary-makes-case-for-mortgage-write-downs/
Donovan and the morally-bankrupt Obama Administration are advocating that the laws of economics should be thrown out the window, including market discipline that rewards prudence and penalizes gambling.
Yes, “some homeowners who owe far more than their homes are worth would conclude ‘there is really no light at the end of the tunnel’ and ultimately default on their mortgage.” This is how economics works. They will become renters, which is what they should have been in the first place.
“Homeownership” is a myth and a pipe dream for many, which was oversold and became a “sacred cow.” It is not a government entitlement—or if it is, we should all get free homes.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1630 and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1668 and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1997
Edward DeMarco is correct in thwarting principal forgiveness, but he does not fit into the Obama Administration’s political mold of rewarding gamblers and others who deserve no rewards, or worse. They gambled and lost. This is the lesson to be learned, not more government bailouts.
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Traditional Economists Are Clueless
An article appearing in the UK’s Economist discusses the differences between economists and historians, and the professional rivalry between the two groups.
See http://www.economist.com/blogs/buttonwood/2012/04/duelling-academics (“Duelling academics: Historians versus economists”)
First, there are “economic historians” who bridge and “marry” the disciplines—and will become increasingly important during the next 20-40 years, as they look back and describe this decade as the “Great Depression II.”
My undergraduate major was economics; and the last course that I took at UCLA was “Economic History.” I thought at the time that it was dry and boring, but I have realized for years now that it may have been the most important course in economics. Among other things, it described depressions and other economic upheavals over hundreds of years, which has helped to put the last century and this century into perspective.
Second, economists generally are like lemmings marching in lock step to the sea. Few are courageous enough to make predictions that are at odds with their peers, for fear of being ridiculed and viewed in academic circles as “heretics.” At best, they are capable of assessing what happened in the past, but essentially clueless with respect to predicting the future.
Their track records approximate those of weathermen (and women), whom—as most of us know—are dismal-to-pathetic in predicting today’s weather, much less the weather next week. Far too often, they are wrong, and decidedly so.
Third, global economies are being tested like never before, since the Great Depression of the last century, which did not end until the onset of World War II, at the earliest. This time, there are “green shoots” too—or signs that things are improving—which will turn into “dead weeds” with the passage of time.
The euro’s days are numbered—and it has been correctly observed:
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2110
Throw in the problems with North Korea, Iran, the collapse of Afghanistan, chaos in Pakistan, the “Arab Spring” that engulfs Israel and the rest of the region, China’s imperial ambitions in Asia and elsewhere, “dictator-for-life” Putin’s brutal ambitions, terrorists’ goals, and we have the recipe for very challenging times during the balance of this decade.
The human suffering will be enormous; and economists generally have their heads in the sand, and are oblivious to the storm clouds that are gathering.
Again, 20-40 years from now, economic historians will describe this period, but pure economists are essentially clueless today.
But see http://www.moneynews.com/StreetTalk/Shiller-Housing-home-Rebound/2012/04/24/id/436900?s=al&promo_code=EBB8-1 (“Yale’s Shiller: US Housing May Not Rebound ‘in Our Lifetimes’); see also http://www.reuters.com/article/2012/04/28/us-greece-election-suicide-idUSBRE83R08N20120428 (“Suicides have Greeks on edge before election“)
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If I Wanted America To Fail
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Housing: The Abyss [UPDATED]
Not surprisingly, it has been reported by Reuters—in an article entitled, “Falling home prices drag new buyers under water”:
See http://www.reuters.com/article/2012/04/26/us-usa-housing-negative-idUSBRE83P12E20120426 (emphasis added)
Those areas of the United States that have not been affected significantly yet, will join the other areas and be hit hard in the months and years to come. Writing in the Christian Science Monitor, leading economist Gary Shilling said:
See http://www.csmonitor.com/Business/new-economy/2012/0425/Fed-sees-more-growth-Don-t-count-on-it.-Recession-ahead (“Fed sees more growth? Don’t count on it. Recession ahead”); see also http://www.newsmax.com/Headline/shilling-housing-prices-falling/2012/04/27/id/437343 (“Shilling: Housing Prices Will Plunge 20 Percent More”) and http://www.moneynews.com/StreetTalk/Shiller-Housing-home-Rebound/2012/04/24/id/436900 (“Yale’s Shiller: US Housing May Not Rebound ‘in Our Lifetimes’“) and http://www.telegraph.co.uk/finance/recession/9233781/Double-dip-recession-to-trigger-house-price-fall.html (“Britain’s official return to [Double-dip] recession has raised the risk of a sharp fall in house prices, economists have warned”)
As I have written in comments above:
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1630; see also http://www.gallup.com/poll/154124/U.S.-Homeownership-Hits-Decade-Low.aspx (Gallup: “U.S. Homeownership Hits Decade Low”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1848 (“The Bottom Will Drop Out Of The American Real Estate Market”)
Whether the plunge in housing prices is 20 or 50 percent—or greater—remains to be seen. Clearly there will be geographical differences in the United States, just as there are now. In the final analysis, however, there is no question that cash will be king. Those with cash will be able to “bottom feed.” Between now and then, even more Americans and people of other countries will suffer like never before in their lifetimes, and dreams and hope will be crushed.
“Home ownership”—which has been touted by homebuilders, realtors and politicians for decades—will be exposed as a cruel, heartless and tragic pipe dream for many.
. . .
The housing crisis is hitting other countries as well. In an important article by the UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, which is entitled “France faces 40pc house price slump”—and subtitled, “France faces a property slump of Anglo-Saxon proportions as the frothiest boom in French history finally tips over, threatening the country with an economic shock just as austerity hits”—it is reported:
See http://www.telegraph.co.uk/finance/economics/houseprices/9244152/France-faces-40pc-house-price-slump.html; see also http://online.wsj.com/article/SB10001424052702303822204577464533347348246.html?mod=WSJ_hpp_sections_realestate (“Las Vegas Estate Price Slashed By Nearly 75% to $6.9 Million [And It Still Has Not Been Sold]“) and http://www.dailymail.co.uk/femail/article-2175497/Oprah-Winfrey-sells-Chicago-apartment-loss-2-75million–asking-price-HALF-figure-paid-years-ago.html (“Oprah Winfrey sells Chicago apartment at a loss for $2.75 million—under the asking price and HALF the figure she paid six years ago“) and http://www.cnbc.com/id/48240142 (“Foreclosure Crisis Hits Older Americans Hard”—”Older African-Americans and Hispanics are the hardest hit”) and http://live.wsj.com/video/prices-crash-at-luxury-golf-communities-/6C8347EB-8BFE-4C5E-B9F4-21361036480C.html (“Prices Crash at Luxury Golf Communities”) and http://www.moneynews.com/StreetTalk/Shiller-housing-upswing-questions/2012/11/01/id/462360 (“Yale’s Shiller to CNBC: Housing Recovery Could Take 50 Years“) and http://www.dailymail.co.uk/tvshowbiz/article-2230865/Sharon-Stone-finally-sells-lavish-Beverly-Hills-mansion-6-6million–takes-staggering-price-hit.html (“Sharon Stone finally sells her lavish Beverly Hills mansion for $6.6million… but takes staggering price hit”) and http://www.dailymail.co.uk/news/article-2243564/Firesale-Hamptons-estates-owners-try-unload-multimillion-dollar-homes-years-end.html (“Firesale of Hamptons estates as owners try to unload multimillion dollar homes before year’s end”) and http://www.telegraph.co.uk/finance/financialcrisis/9768067/Spains-house-prices-to-fall-another-30pc-as-glut-keeps-growing.html (“Spain’s house prices to fall another 30pc as glut keeps growing“) and http://www.telegraph.co.uk/finance/financialcrisis/9809723/SandP-sees-deeper-house-price-falls-in-eurozone-as-slump-engulfs-core.html (“S&P sees deeper house price falls in eurozone as slump engulfs core”—”France’s house . . . sales collapsed by 24pc in September from a year ago, the usual precursor of price capitulation by sellers”) and http://www.dailymail.co.uk/news/article-2307123/Home-buyers-paying-higher-percentages-income-new-house–worst-city-San-Francisco-houses-cost-seven-times-average-salary.html (“Home buyers are spending more of their incomes on houses now than they ever did before the housing bubble. . . . Real estate watchers fear that this could be creating a new housing bubble“)
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Suicides, Growing Despair And Hopelessness May Be The Future [UPDATED]
[Florence Owens Thompson was the subject of Dorothea Lange’s photo Migrant Mother (1936). The Library of Congress caption reads: “Destitute pea pickers in California. Mother of seven children. Age thirty-two. Nipomo, California.” See also http://www.dailymail.co.uk/news/article-2290879/I-lost-hope-Startling-interview-unearthed-woman-iconic-Great-Depression-image-talking-just-years-death-1983.html (“‘I never lost hope’: Startling interview unearthed with woman behind iconic Great Depression image talking just five years before her death in 1983”)]
. . .
During the Great Depression of the last century, there were stories about men jumping out of windows in the wake of the Crash on Wall Street, or otherwise committing suicide because they could not cope any longer. Also, there were images of poverty and despair such as Dorothea Lange’s famous photo of a mother and her children, which appears above and is forever etched into the American consciousness and psyche.
During the balance of this decade, as the “Great Depression II” continues to unfold and the economic tsunami runs its course, similar graphic reminders of human suffering will become increasingly evident. Indeed, a Reuters’ article entitled “Suicides have Greeks on edge before election” may foretell the future globally:
See http://www.reuters.com/article/2012/04/28/us-greece-election-suicide-idUSBRE83R08N20120428; see also http://hosted.ap.org/dynamic/stories/E/EU_GREECE_RISE_OF_THE_FAR_RIGHT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-04-30-07-50-00 (“Rise of far right in Greece worries mainstream”) and http://www.telegraph.co.uk/finance/economics/9235091/Spains-woes-to-deepen-as-it-double-dips-into-recession.html (“Spain’s woes to deepen as it double-dips into recession”) and http://www.telegraph.co.uk/finance/financialcrisis/9235620/Cameron-says-eurozone-debt-crisis-has-years-to-run.html (“[UK’s] Cameron says eurozone debt crisis has years to run”) and http://www.wnd.com/2013/04/americans-snapping-by-the-millions/ (“STRESSED & DEPRESSED: AMERICANS ‘SNAPPING’ BY THE MILLIONS“) and https://naegeleblog.wordpress.com/2012/02/07/poverty-in-america/ (“Poverty In America”)
What has occurred in Greece may be a precursor of what is to come in Europe, in the United States and globally. Indeed, the human suffering may be unfathomable during the balance of this decade. Yet, the human spirit will survive and triumph ultimately.
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EXACTLY …America’s future is California, and California’s future is Greece
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Thank you, Colin, for your comment.
Indeed, you have summarized succinctly what I have said in other comments throughout this blog.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2300 (“California is the most populous U.S. state, and its gross domestic product (GDP) is larger than all but eight countries in the world. In a very real sense, it is a microcosm of America—and of things to come”)
I love California, where I was born and raised; and I love the United States too. We have a country that is second to none; and America will survive, despite tough times ahead. California will too; and its natural beauty is unsurpassed and can never be tarnished . . . or the resilience and undergirding faith of the American people.
See https://naegeleblog.wordpress.com/2010/02/26/america-a-rich-tapestry-of-life/
Sadly, Greece, Europe as a whole, and other parts of the world may not fare nearly as well as the United States.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2306 (“Greece’s Death Spiral”)
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Beware: Deflation Arrives, In China And Globally
As the UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, has written in an article entitled, “World edges closer to deflationary slump as money contracts in China”:
See http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9263196/World-edges-closer-to-deflationary-slump-as-money-contracts-in-China.html
Ambrose Evans-Pritchard is correct. If anything, he is too conservative and “timid” in his predictions.
We are in the midst of the “Great Depression II,” which economic historians will describe as such 20-40 years from now. It will not run its course until the end of this decade, at the earliest. Between now and then, the human suffering will be unfathomable, and politicians will fall like dead flies.
Yes, there will be “green shoots” from time to time, or signs that things are improving. This was true during the Great Depression of the last century as well, which did not end until the onset of World War II, at the earliest.
Nicolas Sarkozy has been defeated in France. Barack Obama will be defeated in the United States. And other politicians will be exiting the world’s stage as well.
As I wrote more than three years ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html (“Euphoria or the Obama Depression?”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2134 (“Housing: The Abyss”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2135; see also http://www.telegraph.co.uk/finance/financialcrisis/9263758/Backlash-in-Europe-threatens-to-derail-austerity-measures.html (“Backlash in Europe threatens to derail austerity measures”) and http://www.telegraph.co.uk/finance/comment/rogerbootle/9263156/The-final-death-throes-of-the-euro.html (“The final death throes of the euro“) and http://www.economist.com/node/21554549 (“The euro crisis”) and http://www.cnbc.com/id/47428134 (“[T]wo things that will change my attitude about this market is if we see a depression in Europe and a hard-landing in China”—both may be coming) and http://www.telegraph.co.uk/news/worldnews/europe/greece/9268507/Greece-on-brink-of-collapse.html (“Greece on brink of collapse“) and http://www.telegraph.co.uk/finance/financialcrisis/9270884/Debt-crisis-Greek-euro-exit-looms-closer-as-banks-crumble.html (“Debt crisis: Greek euro exit looms closer as banks crumble“)
Hold on tight. Things will get very ugly!
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The Power Of Hope
An article in the UK’s Economist about this subject is worth reading.
See http://www.economist.com/node/21554506
Hope and faith in God are needed today, and will be required during the balance of this decade, more than at any other period in our lifetimes. People will be tested like never before.
Compare https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2160 with https://naegeleblog.wordpress.com/2010/05/12/what-and-where-is-god/ (see also the footnotes and comments beneath both articles)
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Education Will Change Radically
In response to my comments that online education is the future, one well-meaning but naïve commenter wrote:
In turn, I responded:
If anything, this may be an understatement.
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The Risk Of Runs Is Real
[Bank run, circa 1933]
The UK’s fine Economist has an article that is worth reading and reflecting on, dealing with runs on financial institutions in Europe, and implicitly worldwide. It is entitled, “Europe’s biggest fear: A run they cannot stop,” and among other things it notes:
See http://www.economist.com/blogs/schumpeter/2012/05/europes-biggest-fear
This article is correct, and its concerns are real. The risk of runs and “contagion,” worldwide, are enormous.
For many years, a major unspoken worry among financial policymakers in Washington has been that there would be a run on America’s mutual funds—or money market investment funds—that would create a liquidity crisis that could not be stemmed by our Fed, and that a panic might ensue.
See, e.g., http://www.smartmoney.com/invest/mutual-funds/why-mutual-fund-guardians-are-failing-1339088682278/?link=SM_hp_ls1e (“Why Mutual Fund Guardians Are Failing”)
Banks are shaky all over the world today; and perhaps the safest are those in the United States because of FDIC insurance. Indeed, the flight of capital to American banks and other investment vehicles from abroad may increase dramatically in the months and years to come, as this decade truly becomes one annus horribilis after another. People will be seeking “safe havens” for their money, and the United States may be the only one.
Twenty-to-forty years from now, economic historians will look back on this period, stretching through the end of this decade at least, and describe it as the “Great Depression II,” or by using similar terms. Yes, there will be “green shoots” from time to time, or signs that things are improving—which was true during the Great Depression of the last century that did not end until the onset of World War II, at the earliest.
Hold on tight. Things will get very ugly, and the human suffering will be unfathomable.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2160; see also http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9278253/Rising-US-recession-risk-poses-the-real-threat-to-Europe.html (“[F]orecasters fear that America has already fallen back into recession, replicating the terrible double-dip of 1937”)
One other factor that is worth mentioning. While Americans are accustomed to the value of FDIC deposit insurance, the people of other nations are not. I bought a failing savings and loan (later a federal savings bank) in San Francisco for clients based in Hong Kong, which at the time was the largest minority financial institution in the United States. Many of its depositors were newly arrived from China, and they spoke no English and had no idea what FDIC insurance was.
Indeed, I was told that they had little experience with banks themselves, and literally kept their money under mattresses. Having timidly trusted our predecessor bank, we were very concerned about the effects of its collapse and our takeover of it. Most importantly, we were very concerned about a run on the bank.
We brought in experts from Hong Kong to shape our media blitz in several Chinese dialects, assuring depositors that their money would be safe after our takeover. Extrapolate this to other countries, where fear can dominate and runs can become panics overnight, and financial systems can collapse. Governments will be powerless to stop them.
. . .
An article in the UK’s Telegraph entitled, “For the eurozone, the worst is yet to come,” is worth reading and very sobering as well:
See http://www.telegraph.co.uk/finance/comment/liamhalligan/9292092/For-the-eurozone-the-worst-is-yet-to-come.html; see also http://www.economist.com/blogs/newsbook/2012/05/indias-economy (“A BRIC hits the wall: India’s economy lurches further down”) and http://www.economist.com/node/21556577 (“The world economy is in grave danger” . . . and there is “a rising risk of financial catastrophe”) and http://www.telegraph.co.uk/finance/debt-crisis-live/9328172/Debt-crisis-live.html (“Greeks take millions from banks ahead of election”) and http://www.cnbc.com/id/47793980 (“Greeks Withdraw $1 Billion a Day Ahead of Vote”) and http://www.telegraph.co.uk/finance/financialcrisis/9333246/Debt-crisis-Rich-Greeks-in-London-face-tax-investigation.html (“Rich Greeks in London face tax investigation”) and http://hosted.ap.org/dynamic/stories/U/US_MAPPING_GREECES_EXIT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-16-09-58-56 (“How shock waves will hit US if Greece drops euro”—”[T]he risk would be high for a run on banks throughout Europe. People would worry that the banks might fail and would rush to withdraw what they could. . . . [T]he crisis could get much worse: Banks could fail, the surviving banks could stop lending to each other, and a credit freeze could shut down commerce in Europe. . . . [T]he dollar would soar to trade nearly even with the euro“)
. . .
At some point, fear and contagion will prevail, and the banking systems of many countries may be overwhelmed and fail. Politicians and governments will be helpless to prevent it. Like a natural tsunami in the great oceans of this world, the economic tsunami will roll unabated through the end of this decade, at the very least.
. . .
As I wrote more than three years ago:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html
There is zero doubt that the worst is yet to come globally, by far. The risk of runs is real, as fear and panics spread!
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Americans’ Wealth Drops 40 Percent, With Much Worse Yet To Come
The Washington Post has reported:
See http://www.washingtonpost.com/business/economy/fed-americans-wealth-dropped-40-percent/2012/06/11/gJQAlIsCVV_story.html
To “sugar-coat” what has been happening (e.g., so Americans will not panic), both the Fed and the Post refer to it as the “Great Recession,” when in reality it is the “Great Depression II,” which is how economic historians are likely to describe it 20-40 years from now—or by using similar terms.
The Post also refers to signs that things are improving, or “green shoots,” which were present during the Great Depression of the last century as well—which did not end until the onset of World War II at the earliest.
Hold on tight. The worst is yet to come . . . by far . . . during the balance of this decade, and the human suffering will be unfathomable!
While foreigners have been snapping up properties in the U.S., housing prices will fall by another 20-50 percent in the next five years or so. When the “bottom” is reached finally, there will be bargains galore for those people who have amassed cash, and waited patiently on the sidelines and then went “bottom feeding.”
See, e.g., http://online.wsj.com/article/SB10001424052702303901504577460550067846454.html and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2134 (“Housing: The Abyss”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2177 (“The Risk Of Runs Is Real”) (see also the article itself, as well as the footnotes and other comments beneath it) and http://www.foxbusiness.com/government/2012/06/12/may-budget-deficit-up-from-year-earlier/ (“DEFICIT DOUBLES IN YEAR“)
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EU Doomsday Scenarios To Limit Bank Runs And Capital Flight
The risk of runs on banks and other financial intermediaries (e.g., mutual funds, or money market investment funds) is discussed above.
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2177 (“The Risk Of Runs Is Real”)
However, consideration is being given to “limiting cash withdrawals and imposing capital controls . . . [and] the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.”
See http://www.irishtimes.com/newspaper/breaking/2012/0612/breaking24.html; see also http://news.yahoo.com/eu-movement-money-people-limited-144836122–finance.html;_ylt=A2KJ3CV.WNdPN10AzDzQtDMD (“[L]imits could be imposed on movement of people and money across national borders within the EU if it’s necessary to protect public order or public security”) and http://www.eubusiness.com/news-eu/finance-public-debt.h3c and http://online.wsj.com/article/SB10001424052702303768104577458301368089854.html (“How the Euro Will End”) and http://ca.news.yahoo.com/us-wont-send-checks-europe-romney-154702519.html (“US won’t send checks to Europe: Romney”) and http://www.telegraph.co.uk/finance/comment/9337283/Greece-will-have-to-leave-EMU-whoever-is-elected.html (“Europe’s depression is spreading”) and http://www.telegraph.co.uk/comment/9337911/Dithering-Europe-is-heading-for-the-democratic-dark-ages.html (Greece: “Every day we read of fresh horrors: of once proud bourgeois families queuing for bread, of people in agony because the government has run out of money to pay for cancer drugs. Pensions are being cut, living standards are falling, unemployment is rising, and the suicide rate is now the highest in the EU—having been one of the lowest. . . . For the sake of bubble-gumming the euro together, we are willing to slaughter democracy in the very place where it was born. What is the point of a Greek elector voting for an economic programme, if that programme is decided in Brussels or—in reality—in Germany?”) and http://www.smartmoney.com/invest/currencies/euro-on-the-brink-1341940632005/?link=SM_hp_invest (“Euro on the Brink”) and http://www.telegraph.co.uk/finance/financialcrisis/9424793/Europe-is-sleepwalking-towards-imminent-disaster-warn-top-economists.html (“The euro has completely broken down as a workable system and faces collapse with ‘incalculable economic losses and human suffering’ . . . according to a group of leading economists“)
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China Transmits A Fresh Deflationary Impulse To A World Already Dangerously Close To Deflation
These are the words of the UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, who has written—in an article entitled, “China exports yet more excess capacity to crippled West”:
See http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100018516/china-exports-yet-more-excess-capacity-to-crippled-west/
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STOCKS MIGHT BE 50 PERCENT LOWER WITHOUT FED!
This is the shocking, but not surprising conclusion of a report from the Federal Reserve Bank of New York that is discussed in a CNBC article, which states in pertinent part:
See http://www.cnbc.com/id/48165921
As I have said repeatedly, the stock market is a “fool’s paradise”—or the world’s largest casino—and the fools are the American people and others abroad who believe and invest in it!
See, e.g., http://seekingalpha.com/instablog/2951-ilene-at-psw/31177-interview-with-timothy-d-naegele (“Interview with Timothy D. Naegele”); see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1464 (“Bernie Madoff: The Market Is A Whole Rigged Job, And There’s No Chance That Investors Have In This Market“) and http://www.americanbanker.com/issues/173_212/-365185-1.html (“Greenspan’s Fingerprints All Over Enduring Mess“)
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Commercial Banking Distinguished From Investment Banking, Or Gambling
The UK’s Economist has an interesting article about the problems with banking, which is worth reading.
See http://www.economist.com/node/21558584
However, the article proceeds from a false premise. The author tars all bankers, which is mistaken.
In the United States, the separation of commercial banking from “investment banking”—or gambling—existed until “deregulation” and the elimination of Glass-Steagall. Former Federal Reserve Board Chairman Alan Greenspan was and is the culprit; and his much-more-talented, wiser and valiant predecessor, Paul Volcker, has tried to put the “Genie” back into the bottle without much success unfortunately. The damage has been done, and we are living with it.
See, e.g., http://www.americanbanker.com/issues/173_212/-365185-1.html (“Greenspan’s Fingerprints All Over Enduring Mess”) and http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html (“Euphoria or the Obama Depression?”)
Second, commercial bankers are paid essentially what they have earned for decades, adjusted for inflation. Their “investment banking” counterparts, the true gamblers, have been compensated as they have been for decades too; namely, at exorbitant rates. The problem is that they gamble with the “house’s money” now, which can produce great rewards or nightmares—and certainly nightmares for their American banking regulators, such as the Fed and the FDIC.
Third, the article refers to “rogue employees who have ignored the corporate culture.” All of this makes sense only if one realizes that there have been two very separate and distinct cultures: the commercial bankers, who are largely conservative and have been for ages; and the “investment bankers” who are gamblers of the worst sort. The only culture to which they have paid homage is the almighty dollar, or other currencies—as the case may be.
Fourth, a fascinating study was just released by the Federal Reserve Bank of New York, which indicates that “the S&P 500 would be more than 50 percent lower—at the 600 level—if the bullish price action preceding Fed announcements was excluded.” Thus, traders (or gamblers—also known as “investment bankers”) could make money by doing nothing more than correctly analyzing the Fed moves, which is arguably much more important than stock picking.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2222
Fifth, the article is correct to point out the doctrine that has undergirded American bank regulation for decades; namely, “too big to fail.” Unfortunately, deregulation and the elimination of Glass-Steagall allowed the foxes into the chicken coops: the “investment banker” gamblers became part of the formerly-conservative commercial banks, and the game changed forever—for the worse.
See also http://www.dailymail.co.uk/news/article-2173171/London-whale-ousted-JP-Morgan-says-blunder-cost-5-8-BILLION-fired-executives-forced-BACK-pay-past-years.html (“JP Morgan admits London Whale blunder cost $5.8 billion—TRIPLE the original estimate—as fired executives are forced to give BACK pay for past two years“) and http://www.naegele.com/documents/TheCaseAgainstRestoringGlass-Steagall.pdf (“The Case Against Restoring Glass-Steagall”)
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Greek Economy Is In Great Depression Similar To The American One In The 1930s, Prime Minister Says
According to an article in the UK’s Telegraph:
See http://www.telegraph.co.uk/finance/financialcrisis/9418656/Debt-crisis-Greek-economy-is-in-a-Great-Depression-says-Samaras.html; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2135 (“Suicides, Growing Despair And Hopelessness May Be The Future”) and https://naegeleblog.wordpress.com/2012/02/07/poverty-in-america/ (“In Greece today, parents are giving away their children because they cannot afford them. Kids are being dumped in streets or abandoned at shelters with notes attached to them, saying that one or both parents are at wits’ end“)
Clinton is correct.
Greece is not the only country in the depression. Twenty to forty years from now, economic historians will describe these times as the “Great Depression II,” which will not end until the close of this decade, at the earliest.
Yes, there will be “green shoots” from time to time, which occurred during the Great Depression of the last century as well—which did not end until the onset of World War II, at the earliest. However, overall things will be very ugly, and the human suffering will be unfathomable.
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China’s Hard Landing
The UK Telegraph‘s International Business Editor in London, Ambrose Evans-Pritchard, has written another article that is worth reading, this time about China:
See http://www.telegraph.co.uk/finance/economics/9465651/Hard-landing-for-China-as-factory-prices-fall-and-deflation-looms.html; see also https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2220 and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2160 and http://www.telegraph.co.uk/finance/financialcrisis/9491069/China-bubble-in-danger-zone-warns-Bank-of-Japan.html (“China bubble in ‘danger zone’ warns Bank of Japan”) and http://seekingalpha.com/instablog/2951-market-shadows/31177-interview-with-timothy-d-naegele (Regarding beliefs that China has bottomed out and its economy is on the mend, and now is a good time to “buy a stake” in China, it must never be forgotten that “the stock market is a ‘fool’s paradise'”) and https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/ and http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100021244/us-to-overtake-saudi-arabia-in-oil-as-chinas-water-runs-dry/ (“US to overtake Saudi Arabia in oil as China’s water runs dry”)
Clearly, the worst is yet to come!
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IMF: Global Recovery “Will Take At Least Six More Years”
As the UK’s Telegraph has reported:
See http://www.telegraph.co.uk/finance/financialcrisis/9585027/IMF-Global-recovery-will-take-at-least-six-more-years.html
As a public figure, Blanchard was being prudent and conservative in his statements. Yet, they are totally consistent with what I have written above; namely, we are in the midst of the “Great Depression II,” which will not run its course until the end of this decade, at the earliest.
Furthermore, governments are not the solutions; and most governmental efforts will make the problems markedly worse.
Hold on tight. The worst is yet to come, by far!
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Happy Days Are Not Here Again
This is the title of a Wall Street Journal editorial, which requires emphasis. One must remember that there were “green shoots,” or signs that things were improving, during the Great Depression of the last century too, which did not end until the onset of World War II at the earliest.
The editorial states:
See http://online.wsj.com/article/SB10000872396390444223104578038623709703516.html?mod=WSJ_hpp_sections_opinion
The “Great Depression II” continues its brutal march forward, following a path not dissimilar to the Great Depression. And Barack Obama’s political fate next month is likely to mirror that of Jimmy Carter, who was a one-term president too.
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Your words seem almost prophetic. You wave a flag of caution and I agree with it. The challenge is what should the fathers and mothers on this Thanksgiving holiday be doing? Bonds?, get out of the Market? Cash only? What is your wisdom on this…? with thanks!
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Thank you, Rod, for your comments.
I have been “preaching” cash only for a long time now, and the idea of sitting on the sidelines patiently, waiting for the “bottom”—which will be reached in the American housing market in about five years or so. Then, there will be bargains galore for those who are able to go “bottom feeding.”
Please read the comments above this one (and beneath my article above), and you will find that they are consistent with what I have just written.
Will others make money with bonds or stocks or other investments in the interim? Sure . . . people make money gambling all of the time, but most lose money. The surest “bet,” or so I believe, is to be conservative and wait for the bottom.
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I am embarassed that I think I NEED to be in the Market. I do appreciate you reminding me that the Market is the biggest CASINO around…why do I think I have to have my money in it?? If everybody is doing it…that is a good reason not to!
With great thanks!
Rod from Vancouver!
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Thank you again, Rod, for your comments and kind words.
You might wish to read my responses in an interview three years ago, inter alia, about the market being a “fool’s paradise.” This remains true today.
See http://seekingalpha.com/instablog/2951-market-shadows/31177-interview-with-timothy-d-naegele
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Crime Will Increase Dramatically In America
During the balance of this decade, crime will increase in the United States as economic conditions worsen and poverty increases, and as criminals are released because of overcrowding in the prisons, and as law enforcement declines because of budgetary cutbacks that cannot be avoided. One shining example is the State of California.
The UK’s Daily Mail has reported in an article entitled, “Bursting at the seams: Uncompromising pictures from inside America’s overcrowded prison system show the cramped and impersonal lives lived by more than two million inmates”:
See http://www.dailymail.co.uk/news/article-2223626/Prisons-America-breaking-point-million-citizens-bars.html; see also http://sanfrancisco.cbslocal.com/2012/10/30/chickenpox-outbreak-puts-san-quentin-state-prison-on-lockdown/ (“Chickenpox Outbreak Locks Down San Quentin”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/ (“The Economic Tsunami Continues Its Relentless And Unforgiving Advance Globally”) and http://www.dailymail.co.uk/news/article-2238577/Maria-Santos-Gorrostieta-executed-surviving-assassination-attempts.html (“They got her in the end: Mexico’s fearless woman mayor who survived two drug gang assassination attempts is beaten to death and dumped by the roadside“)
California is the most populous U.S. state, and its gross domestic product (GDP) is larger than all but eight countries in the world. In a very real sense, it is a microcosm of America—and of things to come.
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Greece’s Death Spiral
The UK Telegraph has two articles about Greece that are worth reading. In the first one by Ambrose Evans-Pritchard, International Business Editor of The Daily Telegraph, he writes:
See http://www.telegraph.co.uk/finance/financialcrisis/9647098/Greek-death-spiral-raises-heat-for-German-bloc-creditors.html
In the second article, also by Evans-Pritchard, he writes:
See http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100021059/the-german-bloc-will-have-to-take-its-bitter-medicine-in-greece/; see also http://www.cnbc.com/id/49606194 (“Greece Running Out of Cash; Government Under Threat”) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2235 (“Greek Economy Is In Great Depression Similar To The American One In The 1930s, Prime Minister Says”) and http://www.cnbc.com/id/49757552 (“Greece Says Cash Reserves Almost Depleted”)
The chickens are coming home to roost, and the human suffering and political turmoil will be staggering—as the economic tsunami continues its relentless and unforgiving advance, globally.
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This blog is very hard to study and understand because the various posts do not have a day month and year tag.
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Thank you, Mike, for your comment.
First, I did not design the format. It is a WordPress.com Web site; and it uses a “template.”
Second, the day, month and year of all articles and the comments beneath them are indicated. For example, the quotation that you cited appears in the article of mine at the top of this page entitled, “The Economic Tsunami Continues Its Relentless And Unforgiving Advance Globally,” which was published on “27/9/2010” or September 9, 2010. Footnote 5 refers the reader to two other articles that may be of interest.
Similarly, your comment (or post) immediately above this one was published on “2/11/2012,” or November 2, 2012, which is today; and the day, month and year are indicated to the right of your comment. The same thing is true of these comments of mine, and all other comments above yours.
Third, once the articles such as the one at the top of this page are published, I do not make any changes to them. However, my comments beneath the articles are sometimes updated.
For example, I have a comment above entitled, “Housing: The Abyss” (see https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2134), which I updated this morning to include a new article entitled, “Yale’s Shiller to CNBC: Housing Recovery Could Take 50 Years” (see http://www.moneynews.com/StreetTalk/Shiller-housing-upswing-questions/2012/11/01/id/462360).
The date of that addition (or update) is not shown; however, the day, month and year of all articles and the comments beneath them are shown.
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This is very sobering stuff, which I very much agree with. The problem is the general public seems only to react to sensationalism, then goes back to watching “Homa Simpson” in a stupefied state. Now is the time to prepare for the coming events as they slowly, ever so slowly unfold. Your decade long timeline may be a little understated?
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Thank you, Martin, for your comments.
Yes, indeed, my timeline may be understated. For example, Yale University economist Robert Shiller has warned it could take 50 years for U.S. housing to return to its previous levels.
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2134; see also http://www.telegraph.co.uk/finance/financialcrisis/9681868/1930s-medicine-pushes-Europe-back-into-double-dip-recession.html (“[I]t is going to get worse next year. . . . Europe has imposed dusted-off policies from the 1930s and they are driving peripheral countries towards depression”) and http://www.telegraph.co.uk/finance/globalbusiness/9676259/US-Conference-Board-fears-Brics-miracle-over-as-world-faces-decade-long-slump.html (“US Conference Board fears Brics miracle over as world faces decade-long slump”) and http://www.telegraph.co.uk/finance/financialcrisis/9720053/French-economy-buckles-as-car-sales-collapse.html (“French economy buckles as car sales collapse”)
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The West Is Signing Its Own Death Sentence
On April 8, 2009, in an op-ed “Commentary” for the McClatchy Newspapers and McClatchy-Tribune News Service entitled “Euphoria or the Obama Depression?” I wrote:
See http://www.realclearpolitics.com/news/tms/politics/2009/Apr/08/euphoria_or_the_obama_depression_.html; see also http://www.naegele.com/whats_new.html
People are suffering in the United States, the UK, Europe and elsewhere in the world; and this will only get far worse during the balance of this decade.
See, e.g., https://naegeleblog.wordpress.com/2012/02/07/poverty-in-america/ (“Poverty In America”)
Before the McClatchy piece, in an October 17, 2008 article for the American Banker—the daily newspaper of the U.S. banking industry—entitled, “Greenspan’s Fingerprints All Over Enduring Mess,” I wrote:
And I added:
See http://www.americanbanker.com/issues/173_212/-365185-1.html
The chickens are coming home to roost. In an excellent and sobering article by Janet Daley in the UK’s Telegraph entitled, “The West is signing its own death sentence,” she has written:
See http://www.telegraph.co.uk/news/politics/georgeosborne/9730434/The-West-is-signing-its-own-death-sentence.html; see also http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9733486/Europe-clings-to-scorched-earth-ideology-as-depression-deepens.html (“Europe clings to scorched-earth ideology as depression deepens“) and http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9733547/World-risks-fresh-credit-bubble-Switzerlands-BIS-warns.html (“World risks fresh credit bubble, Switzerland’s BIS warns”) and http://www.washingtonpost.com/opinions/charles-krauthammer-the-right-to-work-dilemma/2012/12/13/28e2ce2c-4567-11e2-8061-253bccfc7532_story.html (“The right-to-work dilemma”)
Politicians in America, Europe and elsewhere are economic naïfs at best. Most have had zero training in economics, and they have been leading the world down the primrose path to the “Great Depression II.” One must never forget that the Great Depression of the last century did not end until the onset of World War II, at the earliest; and this depression is not likely to run its course until the end of this decade, at the earliest.
There were “green shoots,” or signs that things were improving, in the Great Depression as well. However, 20-to-40 years from now, economic historians will look back and describe what has been happening and will continue to unfold through the end of this decade as the “Great Depression II,” or by using similar descriptions. The human suffering will be very similar in America, the UK, Europe and globally.
America is likely to fare better than the rest of the world, but it will not escape from massive human suffering, which will be unfathomable.
Hold on tight. Things will get very ugly!
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During the top of the housing bubble, 2005, before blinders were removed and collapse had ensued, Greenspan had signaled his crash-the-economy-on-purpose culpability by advising, during an interview with reporters, THIS QUITE INSANE – as well as being an unethical abridgement of his keep-my-mouth-shut, don’t-move-the-markets, Federal Reserve chairmanship duties! – AND VERY HARMFUL nudge to prospective home buyers: “I think they ought to use an adjustable rate mortgage.”
Why would he advise home buyers to do that, unless he was feeling giddy about helping to do the most harm to the market and mortgage holders when HIS PURPOSEFULLY PLANNED BUBBLE had popped? But for what sinister purpose?
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U.S. Lambasts China For Breaches Of Trade Rules
This is the title of an article in the UK’s Telegraph by its International Business Editor, Ambrose Evans-Pritchard—and subtitled, “Washington has issued a blistering attack on China for persistent breaches of world trade rules and abuse of industrial secrets, accusing Beijing of failing to abide by treaty obligations”—which states:
See http://www.telegraph.co.uk/finance/globalbusiness/9765348/US-lambasts-China-for-breaches-of-trade-rules.html
As an article of mine and the comments beneath it state clearly:
One must never forget that China is America’s enemy: make no mistake about that.
See https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/
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The GOP Saw The “Fiscal Cliff” Looming, And Drove Over It—Into A Fiscal Abyss
The “deal” is done, and Americans will suffer because of it.
See http://www.huffingtonpost.com/2013/01/01/fiscal-cliff-deal-passed-_n_2394022.html (“Fiscal Cliff Deal Passed By Congress After Republicans Cave“); see also http://thehill.com/homenews/house/275295-boehner-tells-gop-hes-done-with-one-on-one-obama-talks (“Boehner tells GOP he’s through negotiating one-on-one with Obama”) and http://www.usnews.com/news/blogs/washington-whispers/2013/01/02/inside-obamas-kailua-beach-vacation-homes (“Obama’s Hawaii vacation has cost taxpayers $7 million, due to the costs of flying Air Force One and an extensive security operation”)
After working on and with Capitol Hill for much of my adult life, I concluded many years ago that the Democrats are “evil” and the Republicans are “Neanderthals,” which is why I have been an Independent for approximately 25 years—having first been a Democrat, and then a Republican.
See https://naegeleblog.wordpress.com/2010/03/31/the-rise-of-independents/
The latest madness in Washington is that the “loyal opposition,” the GOP, caved into Barack Obama to avoid the so-called “Fiscal Cliff,” and instead they drove over it and into a fiscal abyss of unknown depths. Now, the Republicans are fighting among themselves; and the only clear victors are Obama and his Democrats, who completely routed the hapless Republicans as they did in the 2010 lame duck session of Congress.
See https://naegeleblog.wordpress.com/2010/03/31/the-rise-of-independents/#comment-1190 (“The Great Republican Ascendancy Of 2010 Lasted Less Than Two Months!”)
The Republicans are pathetic, which is among the many reasons why they do not control the White House today. African-Americans and Hispanics turned out in record numbers to reelect Obama, while large numbers of Republicans did not vote. Thus, they are getting what they deserve, with much worse coming, while Americans will suffer enormously because of their ineptitude, cowardice, and spinelessness.
See http://www.boston.com/news/politics/2012/president/2012/12/23/the-story-behind-mitt-romney-loss-the-presidential-campaign-president-obama/2QWkUB9pJgVIi1mAcIhQjL/story.html (“The story behind Mitt Romney’s loss in the presidential campaign to President Obama”)
. . .
As I have written in the article above, the economic tsunami continues its relentless and unforgiving advance globally, and will not run its course until the end of this decade at the earliest.
Hold on tight. Things will get much worse.
The human suffering will be unfathomable—in Europe, the United States, and globally. Governments are not part of the solution; they contribute to the problems, intensify them, and move us closer to the financial abyss.
Today, politics on both sides of the Atlantic is “fractured,” to say the least. While U.S. politicians and their counterparts in other countries have been trying to convince their electorates that they have the answers, they are simply holding out false hopes that real solutions are at hand.
See, e.g., http://www.myfoxchicago.com/story/20601722/1-in-3-illinoisans-lives-in-or-near-poverty-level-report (In The Land of Lincoln—and Obama—1 in 3 Near Poverty)
. . .
There are at least three theories that are operating with respect to Germany’s future—which bears on the future of Europe: (1) the rest of the Eurozone will take down the German economy; (2) Germany’s Chancellor Angela Merkel will not be able to save the other countries, and Germans will retreat economically to “fortress Germany” and abandon the euro; and (3) Germans will achieve what they did not in World War II, namely to become the “masters of Europe.”
See, e.g., https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1732 (“Will The Euro Crisis Will Give Germany The Empire It Has Always Dreamed Of?”)
Indeed, it must be noted:
(1) “Germany’s Bundesbank is to repatriate gold reserves held abroad to tighten control and combat currency crises in the future, pulling a chunk of its holdings from New York and all its bullion from Paris.”
(2) “Many analysts say the world is moving towards a de facto gold standard again as China, Russia and other reserve powers boost their holdings to diversify out of dollars and euros.”
See http://www.telegraph.co.uk/finance/personalfinance/investing/gold/9804444/Bundesbank-to-pull-gold-from-New-York-and-Paris-in-watershed-moment.html (“Bundesbank to pull gold from New York and Paris in watershed moment“); see also http://www.telegraph.co.uk/finance/financialcrisis/9789086/Brussels-fears-poverty-trap-for-half-of-Europe-as-North-South-gap-widens.html (“Brussels fears ‘poverty trap’ for half of Europe as North-South gap widens“) and http://www.telegraph.co.uk/finance/financialcrisis/9809723/SandP-sees-deeper-house-price-falls-in-eurozone-as-slump-engulfs-core.html (“S&P sees deeper house price falls in eurozone as slump engulfs core”—”France’s house . . . sales collapsed by 24pc in September from a year ago, the usual precursor of price capitulation by sellers”) and http://www.telegraph.co.uk/news/9826857/Britain-is-experiencing-worse-slump-than-during-Great-Depression.html (“Britain is experiencing ‘worse slump than during Great Depression’“) and http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9825363/Bank-of-America-issues-bond-crash-alert-on-Fed-tightening-fears.html (“Bank of America issues `bond crash’ alert on Fed tightening fears”—”The . . . question is whether the world economy really is at the start of a fresh cycle of growth, or whether the roaring asset rally of the last few months is another false dawn“) and http://www.dailymail.co.uk/news/article-2269094/North-Korean-parents-eat-children-driven-mad-hunger-famine-hit-pariah-state.html (“North Korean parents ‘eating their own children’ after being driven mad by hunger in famine-hit pariah state“)
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i stopped thinking years ago
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Don’t give up, John.
America is likely to fare better than the rest of the world.
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The Fiscal Cliff Explained, And Sequestration
What appears below was sent to me by a lawyer-friend in Washington, D.C.; and neither of us created it, nor do we vouch for the accuracy of the numbers cited. However, I have little doubt that they are close enough.
See also http://cnsnews.com/news/article/real-federal-spending-82290-american-2008 (Drudge: “FEDERAL SPENDING UP $822.90 PER PERSON SINCE OBAMA“) and http://www.washingtonpost.com/opinions/charles-krauthammer-hail-armageddon/2013/02/28/ca8a32a6-81da-11e2-b99e-6baf4ebe42df_story.html (“[F]or Obama, this is not about deficit reduction, which interests him not at all. The purpose is purely political: to complete his Election Day victory by breaking the Republican opposition“)
. . .
If the issue of Sequestration was not so vitally important to our national security and well being, it might be laughable, but it is deadly serious.
See http://thehill.com/blogs/defcon-hill/operations/283981-pentagon-tells-congress-it-will-furlough-800k-civilian-workforce (“Pentagon informs Congress of plans to furlough 800K civilian workers“) and http://timesofindia.indiatimes.com/world/us/US-issues-worldwide-caution-to-its-citizens-of-terror-threats/articleshow/18589455.cms (“US issues worldwide caution to its citizens of terror threats“) and https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-2090 (“Obama Is A Traitor“) and http://www.washingtonpost.com/opinions/bob-woodward-obamas-sequester-deal-changer/2013/02/22/c0b65b5e-7ce1-11e2-9a75-dab0201670da_print.html (Bob Woodward: “Obama’s sequester deal-changer”) and https://naegeleblog.wordpress.com/2013/03/01/is-obama-the-new-nixon/#comment-2494 (“Obama’s Enemies List And His Thugocracy“); see also https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/ (“EMP Attack: Only 30 Million Americans Survive“)
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89,304,000 AMERICANS: NOT WORKING
It has been reported:
See http://cnsnews.com/news/article/296000-americans-drop-out-labor-force-february
. . .
As Peggy Noonan noted in the Wall Street Journal:
See http://online.wsj.com/article/SB10001424127887323628804578346680172271600.html?mod=WSJ_hps_sections_opinion
This is totally consistent with my article on the economy and the comments beneath it. The worst is yet to come, and things will get very ugly!
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/ (“The Economic Tsunami Continues Its Relentless And Unforgiving Advance Globally”); see also https://naegeleblog.wordpress.com/2010/12/22/the-next-major-war-korea-again/#comment-2501 (“North Korea Says It Will Launch Nuclear Attack On America“) and https://naegeleblog.wordpress.com/2011/01/13/china-is-americas-enemy-make-no-mistake-about-that/ (“China Is America’s Enemy: Make No Mistake About That”) and https://naegeleblog.wordpress.com/2012/02/07/poverty-in-america/#comment-2301 (“Crime Will Increase Dramatically In America”) and https://naegeleblog.wordpress.com/2013/03/01/is-obama-the-new-nixon/#comment-2494 (“Obama’s Enemies List And His Thugocracy”)
Noonan added:
This is so so true. I grew up a block away from the fabled Sunset Boulevard in Westwood, a mile west of the lovely UCLA college campus, in an affluent area of Los Angeles—with the super-rich Beverly Hills to the east, Bel Air to the northeast, and Brentwood, Pacific Palisades and Malibu to the west. Leaving the UCLA campus recently, I hit a pothole in the street near the campus, which was similar to those I had hit in Washington, D.C. a number of years before. The streets that I had traveled on my bike as a kid, to watch movies at the Village and Bruin theaters in Westwood, have not been paved in all those years. Hefty tax monies paid by residents have been diverted elsewhere, and wasted.
Noonan continued:
See https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2483 (“The Fiscal Cliff Explained, And Sequestration”); compare http://www.nationalreview.com/corner/342366/white-house-saving-18000-week-cancelling-tours-patrick-brennan (“White House Is Saving $18,000 a Week By Cancelling Tours”) with http://www.dailymail.co.uk/tvshowbiz/article-2290937/MoS-Diary-Adele-lands-biggest-gig-Michelle-Obamas-50th-birthday-party.html (“ADELE, BEYONCE TO PERFORM AT MICHELLE’S 50TH [BIRTHDAY PARTY]”); see also https://naegeleblog.wordpress.com/2010/12/03/barack-obama-is-a-lame-duck-president-who-will-not-be-reelected/#comment-1172 (“Michelle Obama: ‘Let Them Eat Cake!'”) and http://www.latimes.com/business/money/la-fi-mo-savings-financial-emergency-20130130,0,4750796.story (“Nearly half of Americans are one emergency from financial ruin“)
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Eurozone Risks Japan-Style Deflation Trap As ECB Stays Tight
In an article by Ambrose Evans-Pritchard, the UK Telegraph‘s International Business Editor, it is reported:
See http://www.telegraph.co.uk/finance/financialcrisis/9916592/Eurozone-risks-Japan-style-deflation-trap-as-ECB-stays-tight.html; see also http://www.telegraph.co.uk/finance/economics/9926656/Eurozone-industry-in-the-doldrums-as-production-worse-than-expected.html (“Eurozone industry in the ‘doldrums’ as production worse than expected“) and http://www.telegraph.co.uk/finance/economics/9924954/UK-on-track-for-triple-dip-NIESR.html (“UK on track for triple dip“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-2502 (“89,304,000 AMERICANS: NOT WORKING“) and http://www.latimes.com/business/money/la-fi-mo-savings-financial-emergency-20130130,0,4750796.story (“Nearly half of Americans are one emergency from financial ruin“)
. . .
Perhaps most sobering and disturbing are the warnings of Luxembourg’s Prime Minister Jean-Claude Juncker, one of Europe’s most senior politicians, who contends that (1) Europe’s demons are only sleeping, (2) peace is being taken for granted on the continent, and that (3) Europe’s current troubles were chillingly similar to those in the run up to World War I.
In a UK’s Telegraph article, it is reported:
See http://www.telegraph.co.uk/news/worldnews/europe/germany/9922063/Jean-Claude-Juncker-Europes-demons-are-only-sleeping.html
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Worldwide Approval And Image Of The United States Declines Under Obama
POLITICO has reported:
See http://www.politico.com/story/2013/03/world-poll-image-of-us-declines-88816.html (“World poll: Image of U.S. declines”)
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The Great Green Con—”Global Warming” Is A Myth
Like the “Tooth Fairy” and the “Easter Bunny,” the notion of man-made “global warming” is a myth and fraud that has been foisted on Americans and others worldwide. It is akin to Adolf Hitler’s “master race” theory: pure poppycock.
An article in the UK’s Daily Mail discusses “the hard proof that finally shows global warming forecasts that are costing you billions were WRONG all along,” In the article—which is subtitled “No, the world ISN’T getting warmer (as you may have noticed). Now we reveal the official data that’s making scientists suddenly change their minds about climate doom. So will eco-funded [Members of Parliament] stop waging a green crusade with your money? Well… what do YOU think?”—it is reported:
See http://www.dailymail.co.uk/news/article-2294560/The-great-green-1-The-hard-proof-finally-shows-global-warming-forecasts-costing-billions-WRONG-along.html (emphasis added); see also http://www.dailymail.co.uk/news/article-2301851/Coldest-Easter-Sunday-100-YEARS-temperatures-plummet-12C-Britain-shivering-week.html (“Coldest Easter Sunday in 100 YEARS: Temperatures plummet to -12C as Britain faces another week of bitter weather (but at least there’s some signs of spring)“) and http://www.cnsnews.com/news/article/what-global-warming-2012-data-confirms-earth-cooling-trend (“What Global Warming? 2012 Data Confirms Earth In Cooling Trend“) and https://naegeleblog.wordpress.com/2010/09/27/the-economic-tsunami-continues-its-relentless-and-unforgiving-advance-globally/#comment-1127 (“The Lunacy Of The Global Warming Hoax Is In Full Swing“)
All of the money being spent worldwide to address “global warming” would be better spent in pursuit of the “Loch Ness Monster” and the “Abominable Snowman”—or in chasing rainbows.
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