DECEMBER 9, 2008
Of all the things that Obama is likely to do, this worries me most. I don't care as much about the subsidization of green industries, as ultimately the economic damage would be limiting. What would be potentially disasterous is bringing back the cap and trade proposals on carbon emissions. What was proposed last summer would make all this bailout stuff seem like free markets by comparison. As I have mentioned before, it would be the biggest Government cost imposed on the United States since the income tax itself. I hope Obama will pull a fast one here just as he seems he might be doing on everything else he promised the far left. Frankly, if you are a Republican, you probably want them to pass this---we will see a 1994 repeat if they do Obama's Grand Experiment: Global Warming Cap-and-Trade Policy .
(posted at 6:15 pm by Mike Rulle)
Seriously, this is border line evil. Screw the poor. The higher spirit and religious righteousness of protecting mother earth from "global warming" trumps all Poor countries 'need carbon cuts'
(posted at 5:55 pm by Mike Rulle)
In my last essay, The End of Financial Armageddon?, I included a section on stock prices and unemployment. The latter peaks well after the former bottoms. Doug Short at www.dshort.com provides a great visual on this dating back to 1948. He notes that the pattern may be happening again now. Rare is anything I think of that has not already been thought of by someone else. What is interesting here is that he posted his on Friday and I did mine on Saturday. The reason this happens is when thousands of people are reading the same data and articles, you will always find someone looking at the same stuff as you.
(posted at 5:05 pm by Mike Rulle)
I missed this ---gee I wonder why? Because it does not fit the "Depression Porn" or "Financial Armageddon" narrative? Yes. Normally, if you type in the exact headline of a story into Google you will find it in many different locations. I tried doing that with St Louis Fed Chairman Bullard's commentary on the St. Louis Fed sight and got nothing. From the SLF website: "Asked whether he stood by an earlier prediction that the U.S. economy might get by with a less severe 1990-91 style recession rather than a 1981-82 style recession, Bullard said he thought this outlook was still sound, even in light of recent economic data. “Right now, we’re looking for a pretty sharp decline in the fourth quarter, little less sharp in the first quarter, and then, hopefully, things will improve after that,” he said, adding that this scenario would be similar to 1990-91. “I don’t see a prolonged outcome materializing." (Watch the video on Bloomberg's YouTube channel.)"
(posted at 4:49 pm by Mike Rulle)
Former American Express Chairman, Harvey Golub, sounds absolutely Palinesque when he says that ultimately "we must get back to our historic reliance on personal responsibility and market forces, and get government out of economic management. It doesn't do a good job, as the current economic mess amply proves" Getting Out of the Credit Mess . Amen to that. How is this not the dominant financial theme repeated again and again by our "leaders"?
(posted at 4:11 pm by Mike Rulle)
Today's opinion piece by David Brooks Obama Stimulus Plan Lacks Creativity highlights one of the intrinsic problems with any stimulus package. Given the dead head psychology of today's markets, anything which inspires real investment by real investors can be viewed positively. If building "shovel-ready" projects gets that done, then so be it. Keynes would even have had people "bury money in bottles and dig it up again" if somehow that got the animal spirits going in the real world. The problem is twofold. There is no agreement whatsoever among the "Economics scientific community" that stimulus spending even is effective on its own terms. Secondly, inevitably it becomes a vehicle for the party in power's favorite constituency or pet project. Brooks, of Bobos in Paradise fame, would spend on "creative" things like "suburban town squares", while he thinks Obama's plan is "this old house". This is what we have devolved to in the new Obama world, town squares or highways. This is the least efficient method of investing conceivable, justifiable only under the assumption that it is truly "the demand of last resort". Just as long as its "shovel ready".
(posted at 4:00 pm by Mike Rulle)
There must have been a secret law written. It is impossible to read even a mildly positive article that does not include the following statement."The collapse of the U.S. housing market has unleashed the worst financial crisis since the Great Depression" October pending home sales slip 0.7 percent. In science and statistics there is something called "operational definition". An operational definition of a phenomenon is a detailed outline of that data which is going to be measured in the course of a scientific experiment when testing a hypothesis. What measureable data, or operational definition, do we have which can test the hypothesis that this is "the worst financial crisis since the Great Depression"? This is rhetorical.
(posted at 2:00 pm by Mike Rulle)
What happened to looking toward the future? As mentioned recently, the public imagery of today is a backward looking surplus of what Virginia Postrel calls Depression Porn Dynamist Blog: Depression Lust, and Depression Porn. It is depressing enough that the highlight of the day is Obama proposing 1930s style "public works", but then the language has to compound the negative imagery by referencing "shovel-ready" projects; as if we do not have high technology Deere and Caterpillar machinery. Instead of high tech visions of sleek new tunnels, trains and bridges, we instead imagine gloomy WPA workers on the side of the road wearing prison like denim garb leaning on their "shovels". Obama comes in as the so called agent of change and he somehow is leading us backward in time. The 1930s was actually a great time of hope---for the global Socialist movement. The NY Times was winning awards extolling the virtues of Stalin and the intelligentsia was enamored with every experimental idea that could be thought of. It was all a pathetic failure. Obama goes on Brokaw and talks about light bulbs and "weatherizing" our houses and Nancy Pelosi drones on using "non-sequiturian" new speak in her role as head "barber". What kind of absurd garbage is this? There is no doubt we are going to have to slug through this, but at some point we are all going to get pretty tired of it. I am not sure what happens, but this cannot continue. Obama is not even president yet and I am already sick of him, Pelosi, Reid, Frank and the whole lot of them.
(posted at 8:45 am by Mike Rulle)
This really makes me feel better. We will soon have a "fully functioning TARP organization in place" Treasury Weighs Steps to Track TARP Goals. For a while, I was getting worried. These people are beyond ridiculous. They poured accelerant on the flames and 2 months later they drone on about bureaucratic nonsense.
(posted at 7:52 am by Mike Rulle)
Merger volume is down only 28%? That is unbelievable. These guys must be doing more than just "watch CNBC all day and surf the Web". Our Wall Street Journal intrepid reporter seems a little too gleeful "that an overleveraged world created an excess of bankers". Not that he has anything to worry about Tribune Co. files for Chapter 11.
(posted at 7:38 am by Mike Rulle)
Pretty soon they will be designing the color of the packages Dems back ad limits for meds.There are two big themes happening in the economy. The first is the fear and angst at the prospect of taking any risk. This is the dominant theme. The second theme, however, is the increasing power Government is asserting over our lives. The first theme is so powerful, that as risk taking re-emerges, the economy will benefit. But the second theme will limit growth significantly.
(posted at 7:27 am by Mike Rulle)
Maybe I have this wrong, but I thought the reason this was happening Gun owners stock up was not fear of Obama outlawing guns, but that people were logically extracting this future from the headlines.
(posted at 7:19 am by Mike Rulle)
People like Pelosi are in 7th heaven. Professional politicians who have zero understanding of business sit around a committee and dole out money 'We call this the barbershop' In addition to it being unnecessary, it is visually and aesthetically distasteful. How did a country like ours get in the situation where its future is being determined by people like this?
(posted at 7:08 am by Mike Rulle)