I was talking about EM08 (“Economic Meltdown 2008”) with my friend Torben recently, and among the things he said were, "The idiocy of the financial reporting on this is insane." I couldn’t agree more and it is absolutely amazing how even the word "recovery" can be hinted at in the midst of:
1. Record debt.
2. Record deficit.
3. Record trade deficits.
4. Record debt on borrowing, primarily from china whose bitch we are now.
5. The largest heist in history – TARP - to the tune of a trillion is still playing out.
6. Runaway war budgets.
7. Over THIRTY states now headed toward bankruptcy.
8. Related to #7, California - the giant elephant in the room NO ONE is talking about and (depending upon who you’re talking to) the 6-8th largest economy in the world, is in financial ruin with a record debt AND deficit. Related to this; someone please tell me how “The Governator” keeps his job...? Seriously, we had a referendum on Gray Davis and the debt at that time was $4.5 billion – now it’s closing in on $50 billion. I for one am mystified.
9. TRUE unemployment probably around 20%.
10. 50 million uninsured for healthcare and a system so broken and controlled by elite interests it will never in our lifetime be affordable CARE and PREVENTION. This will and can only get worse as tens of millions of boomers are now headed toward old age, retirement and Medicare. It is a ticking time bomb that is not going away, no matter what, like it or not.
11. Credit card debt is now at a trillion. I agree with Meredith Whitney, who thinks it’s a bubble ready to burst.
12. The mortgage crisis is FAR from over. Those "exotic mortgages" that I wrote about almost a year ago when I learned about them via 60 Minutes are about to raise their nasty heads again. If you've been paying attention, no, they're not the generic "sub-primes" but the sub-prime's cousins, the option-ARMs, and they are about to unleash their fury. The absolutely scariest aspect - if you haven't thrown up by now - is that not even the option-ARMS are the end of this madness of exotic mortgages. Stay tuned for the Alt-As….
Sigh. That all of the above is happening and getting worse by the minute – remember the time value of money – is something so absurd and gigantic that it’s like an ant trying to comprehend a mountain. We are in uncharted waters.
A basic strategy in sports is, for example, if you're playing zone and getting whipped, you’ve gotta try man to man. In other words, DO SOMETHING DIFFERENT! By playing to money interests, Obama, Paulson, Geithner, Summers, Dodd … have, once again as in so many before them such as the previous administration - coddled the economic elite by giving them the people’s money which was stolen through fear against our will.
So much for America turning a corner by electing a black president. Back to reality.
This article was first published by The New Technorati