Years ago a friend talked about joining the Navy and going to boot camp (or snorkel camp or whatever it's called for sailors). He was a strapping young buck of 18, riding into the camp on a bus with thirty other athletic young men. And as they passed the obstacle course, they remarked that kinda looked like fun! But when the time came to give it a shot, they were put through a ten-mile run immediately beforehand. It wasn't fun.

That's how I feel about this election. After all the exertions of the war and Hillary's madness, it seemed like we'd enjoy a few weeks of close-action politicking, but instead, we're seeing it all through the distancing lens of the financial nightmare.

And no figure in American life seems fit to lead the way here. Which is not to say the Executive branch is supposed to dictate the proceses in the real estate.... It's just hard to believe that this is the nation that gave the world Lincoln.

PS- Your point is taken, but Sweden can get away with all sort of things in such matters that the United States cannot. Amongst other challenges, the US bears and large and continuing responsibility for Sweden's --and the rest of Europe's-- national defense.

(Whoops. OK, they're not part of NATO after all. But still....)

And no figure in American life seems fit to lead the way here. Which is not to say the Executive branch is supposed to dictate the proceses in the real estate.... It's just hard to believe that this is the nation that gave the world Lincoln.

That is exactly how I feel. And I know what you mean about Sweden. For me, they aren't generally a model of how I'd like this country to run, but I admire their approach in this case, especially vis a vis ours.

Amy - Sweden is economically untenable for the long term. They're spending money faster than they can confiscate it from their citizens.

But, in case you missed it, in the WaMu collapse, the shareholders and bondholders lost EVERYTHING. Stock.Value == 0.0; I'm starting to think the whole Paulson plan was a gigantic head-fake to calm the markets down for a week while FDIC got all the players in a room to arrange things like the WaMu sale.

We don't need a bailout, we need vicodin.

And I'd be hesitant to trust anything interview-wise that comes from any mainstream outlet unless I can see the unedited original tapes. That goes for any candidate.

There are too many people in the media right now that pretty much admit that they are going to do everything they can to ensure the ascension of the new messiah come November.

I don't think you can much compare Sweden to the US. The real question facing the nation right now is whether our current political system, Congress and the Executive branch, has the expertise to navigate the financial system.

My biggest worry is that the problem is too complicated. Even if you were able to get a group of the smartest financial guys together and come up with a solution (which is far from what is actually occurring), it will be so perverted by the time it gets through Congress that it will be ineffective.

My gut tells me that the only real solution is to let the shit hit the fan, and have the government concentrate on the fundamentals, which should be deficit control and banking reform.

One funny by-product of this crisis- I have seen several friends buying big ticket things because they fear losing everything in the market or banks. I am helping a buddy wire up a brand new Jacuzzi today that he bought with money from his retirement account! Home Depot yesterday was packed!

PS- If the world wasn't depressing enough, now Paul Newman is dead. What a great man.

The banks decided unwisely. Let the banks fail. The shareholders failed to exercise prudent corporate governance. Let the shareholders lose their money. The borrowers overextended themselves. Let them go bankrupt.

One qualification. Congress passed stupid laws that fined banks for keeping financially sound loan portfolios. The government caused this fiasco. But the banks could have simply chosen to make no residential loans rather than play Congress' game of financial identity politics. Government created the dimwitted legal regime that caused this crisis, but banks voluntarily made the loans. So, once again, let them fail.

Am I the only one up for personal responsibility? WTF.

I have a degree in economics and a degree in business and I don't have a clue how much this will effect everything. I suspect the amregeddon scenario is overblown.

Good to hear.

I think there are some people who do understand MOST of the implications, including Paulson. Also Warren Buffet, Mohammed El-Erian, Robert Rubin, Bill Gross. But as I said earlier, the politics will pervert any solution.

I could make a guess as to the long term implications of another $700 billion, including a weaker dollar, higher interest rates, higher inflation, higher taxes, anemic job growth, more exotic debt products down the road...

Again I see where you're going, Amy, but I don't think "oversight" is the solution. There's no person or class of people who ought to be making this happen for us. Such a person would be easily corruptible. (In Eric's words, "politics will pervert.") The attraction of the example you present is that the people who hoped to make money lost money, and that's probably what ought to happen here, too. That would include the huge numbers of people (myself included) who permitted dickless, robotic advisers to accessorize our portfolios with financial service stocks...

I enjoying saying this here often: Remember, financial services is the biggest sector of the our economy now. More Americans are trying to make a living with your money --just by feeling it up and shuffling it around-- than through any other enterprise.

In the textbook, wealth is created when assets are moved from lesser- to higher-valued purposes. How could anyone have thought that those people were building something worth having?

Americans are smart, but we're not that smart. This is going to hurt, but we might be better for having gone through it. A nephew likes to point out that Japan should have gone through one of these twenty years ago, and didn't. They've been in the shitter ever since.

The next comment will be very long....

"That strategy held banks responsible and turned the government into an owner."

I'm not sure its much different than what's proposed. As I understand it, the Feds intend to buy up bad mortgage-backed assets and then eventually sell them back to the marketplace (most likely to Wells Fargo, the only seemingly thriving bank right now). Whether its the Swedish model of taking part of the bank's equity in exchange or just taking on the assets themselves, the taxpayers will still be getting something of value in return. Its not just debt forgiveness.

Put me in the "I don't know if I know enough" camp on this one. But philosophically, I can't say I typically favor more government ownership.

But it seems to me this is a lot of effort made to keep interest rates artificially low. LA Times listed recent Wells Fargo jumbo 30 year fixed rate as just over 9%. That's pretty jarring after the decade we've had. OK, yes you can hate all you want on people who can afford a $700k+ mortgage, but if you live in L.A., that's not an unusual loan for a middle class family residence.

After writing four hundred more words I lost interest, but the point was this: America is still a motherfucking great country, the world leader in so many things that we've lost count of how cool we are. The fact that we don't respond as Sweden did means little. We're sui generis, we're head-of-household, where the fucking future.

China had a spacewalk today. Isn't that cute? We got bored with that shit when I was a little boy.....

From the FWIW file -

The reddest-state guy I know, who also happens to be a seasoned Wall Street hedge fund trader assures me that 1) it IS that bad, 2) Congress must act, and 3) $700B isn't enough.

Yikes

>> America is still a motherfucking great country, the world leader in so many things that we've lost count of how cool we are.

Crid, I worry that you are talking about my fathers generation, while my (our) generation surfed the fruits of their labor, and now the Piper wants payment.

And on that thought, it is my fathers generation that is getting so royally screwed, since most of them are living on a fixed income. Anyone else watching the price of bran muffins lately? At Costco they went from $5.49 to $7.99 a dozen just - like- that!

"China had a spacewalk today. Isn't that cute? We got bored with that shit when I was a little boy....."

I wonder what China will do with their new-found space technology experience? Follow our lead again and build incredible aerospace and orbital spy and warfare systems, too?

I don't think they're doing this so they can eventually harvest water vapor on Mars.

Thanks Gog.

Sothething else to think about. I've been teaching my boy how to say "Yo quireo dos tacos, por favor." 4 & obsolete.

1) it IS that bad, 2) Congress must act, and 3) $700B isn't enough. (snakeman99)

Yeah, because he' going to lose his job. So fucking what. I'm not going to support his career choices. He can do what all the high-tech people did ten years ago when their market crashed: get into another fucking industry.

Sure, your Wall St. friend wants to suck the government teet; instead, he can suck ass for all I care.

These days, who the fuck doesn't want to live off of my back? Fuck all.

Eric- Methinks you doth extrapolate too much. Those muffins are heavily processed. mass-produced, ready-to-eat foodstuffs at an outlet known for selling high-volume. They're not the core of the American character or anything.

>the Piper wants payment.

Then I say, give 'er what she wants.

> I don't think they're doing this
> so they can eventually harvest
> water vapor on Mars.

1. Who said they would? Like, are you pretending to be naive?

2. Did you ever express any other hopes for the Chinese space program, of for that of the United States?

> These days, who the fuck
> doesn't want to live off of
> my back? Fuck all.

That's very Brian of you: Maximal bluster, minimal insight, absent irony.

Throughout natural history, every individual organism has struggled mightily to stick his lunch-fellows with the check. Don't feign surprise, and please don't cluck.

"America is still a motherfucking great country, the world leader in so many things that we've lost count of how cool we are."

Word.

"Crid, I worry that you are talking about my fathers generation, while my (our) generation surfed the fruits of their labor, and now the Piper wants payment."

Bullshit. It is the other way around. They are finally talking our language. Not because they have to but because they want to. You will not believe how much Russians, South Koreans, Vietnamese or Chinese are now concerned about our economic health.

They wish us well. Don't be a jerk. We will get through this just like we always did in the past.

That's very Brian of you: Maximal bluster, minimal insight, absent irony. (crid)

Heh. Crid complains of polemics. That's rich. What a hypocrite. Talk about "absent irony." That's a "motherfucking" great mental lapse. Heh.

The insight I'm working with is called 'Economics.' And Crid, it's not 'Home Economics' dear-heart. Specifically, I advocate Austrian School economics.

Throughout natural history, every individual organism has struggled mightily to stick his lunch-fellows with the check. (crid)

Yeah. And "throughout natural history," every organism has fought to keep from paying other fellow's checks, too. How can you claim the one and be ignorant of the other. You can't. More "absent irony?"

Why, shock the Crid monkey, there's even a holistic, consistent theory. It's backed by centuries of observations. It explains the problem with government-sponsored theft and Mercantilism. It's called 'Economics.' I've mentioned it before, Crid.

Don't feign surprise, and please don't cluck. (crid)

Instead of clucking, I'm gonna' crow. Enjoy the humble pie, sweety.

Jeff,

Do you speak English as a second language? I have the faintest idea what you are talking about.

Learn to speak English. I go to school to do that. So can you.

I have the faintest idea what you are talking about. (Chang/crid)

That's because you're dumb.

"1. Who said they would? Like, are you pretending to be naive?

2. Did you ever express any other hopes for the Chinese space program, of for that of the United States?"

Yes, I'm pretending to be naive, and unfortunately I don't have a link to my expressions of hope for the world's space programs because I didn't express them online. So no point in claiming anything I can't prove. Which I think I just did.

Anyway, I for one welcome our new Chinese space overlords and volunteer to help them round up any dissenters to toil in their mysterious Kung Pao spice mines in exchange for an extra pork bun on alternate Sundays.

Two links on the causes of this government-caused financial flatulence.

Progressive policies caused this crisis. More progressive policies won't fix it. The "bailout" is a bad idea. Let them fail.

> complains of polemics.

No, I complain of naiveté. Yeah, Jeff... people want to live "off [your] back these days".

> I for one welcome our new
> Chinese space overlords and
> volunteer to help them round
> up any dissenters to toil in
> their mysterious Kung Pao
> spice mines in exchange for
> an extra pork bun on
> alternate Sundays.

If there's an actual kernel of concern beneath those layers of sarcasm, please present it forthrightly. I can't make it out from here.

China's really kinda poor. This is just a guess on my part, but I'm guessing if the average Joe in China had his say, some of the money spent on the space program would be spent on food inspection rather than spacewalks. That's basically what happened in the United States.

This was kind of the theme of the 400 words I didn't post earlier. Would you like to read them now? Very well... If you insist....

(Continued to avoid linkfiltering)

America is not like the rest of the world.

Last night a friend was complaining that it had been seven years since the attacks, and there was still a gaping hole in Manhattan. He thinks this is evidence of our diminished competence. I'm not so sure.

Shortly after the towers fell, commentators acknowledged that even if someone had the money to immediately rebuild them to the same specifications the next morning, it wouldn't have happened. Getting it done the first time required decades of government shenanigans, included Nelson Rockefeller swinging a quasi-public fiscal boner of postwar record-setting dimensions. Entire neighborhoods were razed for the initial construction. The mere advance of environmental regulations since the 1960's would have been sufficient to sink the project; no one will ever, ever be permitted to build something like the twin towers in Manhattan again. That doesn't mean something's wrong!

And let's remember, they weren't pretty architecture anyway. They were offputting from the outside, and views from within weren't as good as you expect. They were great buildings and a wonderful icon for the city... I'll always remember my last glance at them on the way to JFK in the summer before they fell. But they hardly represented the grace of capitalism.

Now look at "modern skyline" in Google. You won't be surprised to see Dubai there.... But the labor that builds these hypermodern shapes is essentially slavery. (I don't know what happens when a construction worker loses a hand under a runaway cart of cement in Dubai, but I bet it's not a lawsuit followed by comfortable retirement.) Apparently, zoning is not such a problem over there. And of course, you know where the money comes from.

(Continued to avoid linkfiltering)

Does this mean that Dubai has a stronger civic sense than Manhattan, or even Bakersfield?

This has not been a great generation for American public monuments. The greatest of my lifetime is probably the St Louis arch. Second place would probably be the Vietnam memorial. While the arch was not easy to build, both of these are regarded more as achievements of good taste rather than of engineering prowess.

And after those two, nothing even comes to mind. (The Red Line extension to North Hollywood was obviously a more challenging enterprise than either of those. It cost $7 billion. But nobody's really impressed.)

Maybe Americans have found better things to do with public space and money than build showy things. I think our whole economy may be like this... We're so attuned to the needs of broader community that $parkly ideas get diffused before they get completed. The big-budget projects --skyscrapers or sky travel-- don't fail to generate enthusiasm just because lazy Americans like to shit on the dreams of genius, or because all the courage of the founding fathers has left us. They fail because they would intrude on the lives (and budgets) of people who have political representation... The kind of people who weren't consulted in earlier generations, and still aren't consulted in the middle east.

You wanna call a basketball arena Staples Center rather than The Los Angeles Memorial Interior Space? It's OK be me and most other people... We don't care about basketball anyway. Kobe Bryant never did shit for me; the larger civic spirit of our region has no particular interest in his success, and should have as little financial investment as possible. Let's not pretend we're all in this together, OK?

China wants to go to outer space: Cool. I hope it goes safely and they learn lots of neat stuff. It's not a surprise that they're interested. I don't think they'll find anything we haven't seen already. (In 1970, there was a public display of moon dust at the library in the college town where I grew up. It was grey. It looked dry.) And I don't think they'll pursue any mischief that could catch us off guard.

My biggest concern about the Chinese space program is that the budget could probably be spent improving earthly lives in obvious ways. And if the rampaging hordes figure that out, there'll be hell to pay.

Jeff, the point you're missing in your "let it burn" moment is this:

Very real people who have NOTHING to do with the problem (like Amy, for instance, who doesn't even HAVE a mortgage) are going to be hurt by this.

If we have a financial sector collapse, it's going to be like a black hole, sucking in everything else around it.

It's easy for a Reasonoid to say "Let them go back to cash" when told that business pretty much runs on short-term credit these days. That's not feasible any more.

You can't tell a business to "save up" for that new CNC machine which costs a quarter of a million dollars. They need that machine NOW to get the cash flowing. Hence the need for short-term high-dollar credit.

What we are on the precipice of, and it's all the result of criminal incompetence, is a complete collapse of the commercial paper market.

Which will have the ultimate effect of your credit limits on your Visa going to 0.

Are you in a position to live a completely cash lifestyle? Do you know anyone who is, or even CAN BE?

Did anyone see yesterday's news?

Our - pardon me, I mean NASA's new rocket is testing very well. In a few years we'll be walking around on the moon again!

Very exciting.

Nope... Still can't tell if you have a point to make....

Frank Zappa said many illuminating things about music, and he said one brilliant thing about text: "Facetiousness hardly ever translates onto print."

"Nope... Still can't tell if you have a point to make...."

I believe you.

No, I complain of naiveté. Yeah, Jeff... people want to live "off [your] back these days". (crid)

I'll simply cite the massive growth in entitlements, which entitlements are now being extended to multi-billion dollar corporations. Forget naivete. To me, it's actually willfully stupid to fail to notice. Who's done that? Not me.

So, yeah. Lots of people want to live off my back, Crid. Your's too, if you are a productive citizen.

Corporate welfare. I don't want to pay for that shit. I don't think it's just that I pay for that shit. I don't think it's prudent policy for the law to require me to pay for that shit. I think it weakens the economy in the long run, if I have to pay for that shit.

I might be wrong, but I'm not naive.

Jeff, the point you're missing in your "let it burn" moment is this: Very real people who have NOTHING to do with the problem (like Amy, for instance, who doesn't even HAVE a mortgage) are going to be hurt by this. (brian)

Every economic act affects others. In minute ways, every economic act affects everyone. So what? A bail out that costs $10,000 per citizen will also affect Amy, and perhaps in worse ways than letting a few large businesses fail.

When large financial institutions believe they will be bailed out, they will tend to take more risks, creating another bubble. In my lifetime, I've seen three of these bubbles. These bailouts act just like a subsidy.

You need only look at the continual and continuing bailouts of the American auto industry to see the effects of this kind of beggar-bowl management by corporations. Look also to the Fucking Macs, who took insane risks precisely because they knew they were "backed" by the government.

This bailout is the same policy that caused the need for the bailout! It will inevitably lead to another bubble. The bad money, created by the government itself, must shake out. Nothing will stop that. Nothing.

Effects on others is no reason for the government to prefer one business interest over another. The government has no authority to pick winners and loser in the economy. If we allow the government to arrogate this kind of authority, the long term damage to our free economy will far outweigh our short-term discomfort.

Liberals like to do that... Feel so aggrieved, so gosh-darn appalled at how the world is, that they just can't be bothered to express these truths that are so apparent to them... Patterns so simple simple and abundant that they can't find the words.

Liberals, and children.

(Hi Chang!)

(PS- This is why they lose elections, too. There's a reason they can't find the words, and it ain't about emotional fitness....)

Are you in a position to live a completely cash lifestyle? Do you know anyone who is, or even CAN BE? (brian)

I really feel the need to reply to this directly. In fact, yes. I have no debt. For example, I have never financed a car. Instead, I make a car payment into a savings account, and buy my cars for cash when I have enough. Adding each trade to the deal, I've worked my way into a nice car on just cash.

If people have built a lifestyle by financing depreciating or perishable assets, why am I responsible for their stupidity?

Why do these stupid people want to live off my back? Why should the government assist them by taking my assets by force? What incentive does that give me to be financially responsible? What happens when no one is?

Liberals like to do that... Feel so aggrieved, so gosh-darn appalled at how the world is, that they just can't be bothered to express these truths that are so apparent to them... Patterns so simple simple and abundant that they can't find the words. (crid)

It's like you forget that there is a written record of the conversation. I have the words. I've written coherently why I'm outraged.

So you're just making things up to poison the well of the opposition.

Liberals do that. And stupid people. And smart people who are also dishonest.

Children are usually better than that, though.

Having dispensed with you, I was speaking to the other guy. It's all in the transcript.

(Would everyone who feels they are getting good value from their government please speak up now?

[crickets]

Very good. Be sure and check in again before the election.)

Criditas schreibe: "China wants to go to outer space: Cool. I hope it goes safely and they learn lots of neat stuff. It's not a surprise that they're interested. I don't think they'll find anything we haven't seen already. (In 1970, there was a public display of moon dust at the library in the college town where I grew up. It was grey. It looked dry.)"

Iberia got a nice if temporary ride out of Henry the Navigator's craziness.

Whoever first achieves access to asteroidal resources will likely dominate the 22nd century. China is neither stupid nor crazy, and is well known for executing long plans. Rather than condescend, we'd do well to ask ourself "what do they know that we've forgotten?".

--
phunctor

> China is neither stupid nor
> crazy

Who said they were stupid or crazy? I said they were corrupt in their fundamentals, and thus likely to be incompetent. (Sniff that glass of milk before you pass it to Junior, OK?)

> and is well known for
> executing long plans

By whom? Such as? All their planning has to date left much of their population in illiterate poverty, as noted above.

PS- Please name three "asteroidal resources", and describe the market in which these articles are priced.