Depression 2.0? 30 Reasons Why
1 America's credit rating may soon be downgraded below AAA
2 Fed refusal to disclose $2 trillion loans, now the new "shadow banking system"
3 Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse
4 King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets
5 Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses this year
6 AIG bails big banks out of $150 billion in credit swaps, protects shareholders before taxpayers
7 American Express joins Goldman, Morgan as bank holding firms, looking for Fed money
8 Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states
9 State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt
10 State, municipal, corporate pensions lost hundreds of billions on derivative swaps
11 Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up
12 Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
13 Fed also plans to provide billions to $3.6 trillion money-market fund industry
14 Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
15 Washington manipulating data: War not $600 billion but estimates actually $3 trillion
16 Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs
17 Commodities down, resource exporters and currencies dropping, triggering a global meltdown
18 Big three automakers near bankruptcy; unions, workers, retirees will suffer
19 Corporate bond market, both junk and top-rated, slumps more than 25%
20 Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
21 Unemployment heading toward 8% plus; more 1930's photos of soup lines
22 Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists
23 China's sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting
24 Despite global recession, U.S. trade deficit continues, now at $650 billion
25 The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities
26 Now 46 million uninsured as medical, drug costs explode
27 New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt
28 Outgoing leaders handicapping new administration with huge liabilities
29 The "antitaxes" message is a new bubble, a new version of the American dream offering a free lunch, no sacrifices, exposing us to more false promises
30 At a recent Reuters Global Finance Summit former Goldman Sachs chairman John Whitehead was interviewed. He was also Ronald Reagan's Deputy Secretary of State and a former chairman of the N.Y. Fed. He says America's problems will take years and will burn trillions.
He sees "nothing but large increases in the deficit ... I think it would be worse than the depression. ... Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds." It'll get worse because "the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government."
Reuters concludes: "Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes. 'I just want to get people thinking about this, and to realize this is a road to disaster,' said Whitehead. 'I've always been a positive person and optimistic, but I don't see a solution here.'"
We see the Great Depression 2.0. Why? Wall Street's self-interested greed. They are their own worst enemy ... and America's too
Okay, enough with the cut-n-paste. However, it has me thinking if I should hold on to that old belt. You know, the one where the buckle part fell off - but it is still in my closet. I'm wondering if I should keep it so that I can boil it and make soup of it in a couple months.
I am also thinking that John McCain threw the election so that he'd let "That One" have to deal with all that crap.
Labels: depression 2.0