We are watching the old snowball effect, as unemployment continues to rise, less will be employed, the less employed the less reason to hire, the more issues with credit, defaults, and to face facts we will turn up when.....without action on China first.....we take this country back from corporations, demand China makes moves in Iran, in North Korea, and exposes their currency to world determination of its value, and explains exactly what subsidizes they give to their workers, and further OPEN THEIR MARKETS TO US! Go on, buy a bond or note, try a yuan, or maybe an equity in China now. Easy right? Easy in Japan. Easy in Chile, in Brazil, in Germany. Open an account and do it. Not so in China. Got a good idea? Try to start a business in China. China's trillion or 2 in our debt is on a computer blip under Kansas City. Their ownership of our real property exists, is not huge, and they are not prevented from doing so. We are in reverse unless a series of rules (which change if they feel threatened at all and cant copy or steal it) .....but sorry, we dont recover short of demanding their markets are open and their currency floats so we can sit and short or buy anything there from our computers here at midnight......and instead, the swap market hidden (they were "toxic assets" and are in reality more toxic now, but we cant see them.....even though the CME has devised an ingneous system to cross similar long with short swaps to get rid of the 450 to 600 trillion ....we dont know...and on PLANET EARTH, with a total GDP of 75 trillion...it would be nice to know...but no mark to market means my mortgage no longer paid, my credit cards, no longer with any value as I am out of money and defaulting, and need government help...the situation now, and with all the unemployed far far higher than the percentage given (right college grads without jobs, looking....but not counted...and all you self employed...recalling the nonsense spewed out about the job creation of the small business, etc, sole proprietorships, small llc's ....you are out of your self owned job (after paying unemployment taxes, social security taxes (that go into the general fund...accounting treachery) and much more.... and are now looking for work but not counted as unemployed, nor the 65 year old retired, with no income now but SS borrowed against our future, too old to be counted. The odd part is government workers are counted and they are a liability to those in the workforce as taxes pay their salary.
In short, we do not recover until we work as cheaply (but with no benefits, no subsidies, etc) as China, Vietnam, Brazil, and India. Then, barring our insolvency going unnoticed, or all the dollars and debt tossed back at us when we are not expecting it, barring the unexpected (which always occurs) it feels that we are never going to recover, unless some far more radical changes than Obama are made, and god knows he is working with such sociopaths (I assume politicians are as they lie so well) he is doing all he can with all the finest help. Each step is measured to change our antiquated corporate run system into a more fair system with shared costs for our "infrastucture" (namely, as the rest of the world knows includes health care FOR ALL and public and private can and do coexist.....and education, and welfare (social security has no money but an IOU from us (our Treasury) and never has....use it as the center for welfare, unemployment (that is living wage on can survive on without killing the banking system, etc) and give it to all those looking for work without it. Allow this for their educated and brilliant minds with innovative thoughts to create new wealth and risk it. Allow 5% to cheat. 5% always cheat. This should not impair the 95%, who make competition grow and are included in the workforce, self employed or not. Cost of health care so high, so imperfect, changing it to payer cost, disallowing pre existing rejection (so you cant sell your sister for any health care) and doing as today, covering the Bush made extra costs in medicare help would aid us all in the long run if we get that far. Break up the banks, smaller is better. Back to states, no brokerage ownership....bring back regulations by state regulators and federal and allow (demand) they not package and sell their mortgages nor use anything but exchange traded swaps as "insurance" so we could have a Bank of America....California. Bank of America...Nevada, Bank of America, Illinois. Fine. All separate. Now, those nasty toxins they own are visible and we know where they are. And Merril is not part of B of A, Bear not part of JP Morgan Chase, Paine Webber not UBS. etc. Separate them and each does what it should. The business each make money in. This is inefficient, but size somehow breeds greed that gets out of control. And the market "resting" higher for some time did so as rules on accounting lied about the system, the TARP money will have to return if they did accounting correctly. And how long would taxpayers let Bank of America, with REAL honest accounting in California (so we know they not only have horrible issues in that area with defaulting mortgages, foreclosures, credit card woes, and swaps that would sink the world.....are they too big to fail? No. Not now. We broke them down to state levels. Change, far more radical (shake it up and roll the dice) change must happen and faster. Or we can not survive. Sell US stocks (and the dollar, and treasury bonds, notes, etc, short the whole batch. As we will find over time exactly what we have been temporarily saved from (going over Niagra Falls in a barrel) and this time now we lower the height and power of the falls.......we bring back Glass Steagal, we prepare for demanding trade end now until they change with China. We make state banking laws again. We bring in a new group of dozens of primary dealers, some one must market our debt.
Housing can not go up. It may, through funding "shared" costs, stabilize but stocks wont. There is no profit in any but the innovative and those who export only and they are smaller than you think, only 10% of our country employed in production. So what exactly are we exporting? Our wealth now. Thats about it. And in exchange we owe. That will halt our progress. In the depression, Dorothy and Toto and Auntie Em had a mortgage (far different both in term and down payment) and none in the workforce only the tin man, lion and scarecrow were in the farming workforce, but as only 3, they did not have group insurance. Their bank went under, and they lost all. But could grow and hedge corn if they wished or barter. Their mortgage was not even found by potter (in a different movie later) for years so they had no payments though in foreclosure and Potter paid twenty cents on the dollar for it two years down the road. Now, out on your ass is faster, but no sales even at these rates means there is big trouble, that unemployment at this level affects far more than anyone thinks, as the real unemployment level, or under employed, or part timers without benefits, amount to 3 times this (see Dr. Drayton, genius award winner's paper on this about 10 years ago in the WSJ and his research ....as he wished with his genius grant....used to help then poor India, Indonesia etc...emerging countries grow by accuracy not lies in their numbers. Another benefit of the European and Canadian (and other) "sharing intracture" as I define it and many of them do too, is that no work from quitting, from graduation and no work, counts all as their welfare system helps all from falling through the cracks into oblivion, there is no credit to allow them to innovate if they fall that far as this country allows.
So things dont look good. And change must continue, and more radically and faster to prevent our demise. When marked to market comes back which it must (ask Japan) and mortgages, swaps, credit derivatives, credit cards, non payment of medical bills too great to pay, car leases and sales defaulted on, and more and more......where is the credit, the innovation to allow for growth. No agency can properly or accurately rate any credit issues of corporations or banks or people then, survival will be tough, and watch NYC and their prices as they are currently only picking your pocket and each others. When property values crash there, we are left in our system with 10%making things. 15% hauling them around to sell. 15% financing them and 27% selling them (as a breakdown of jobs and employment show. If you remove the buyers, with unemployment, cheating if you are China, then what part of this is fixed? None. It gets worse. Reality and numbers of defaults and toxicity are known soon. someday soon. Obama and Geithner I am sure would like to wait until we are stable. But unless the banks are broken up, and anti trust brought (as in Europe) much more quickly (is it appropriate for Walmart to earn 20 cents of EVERY retail dollar spent? or does it destroy competition like the perfect monopoly system in economics?
Some days services have no value. Some days changing all at Best Buy (essentially a monopoly in its way that is STILL not selling profitably without any competition) because another small player that Bush dismissed an enormous anti trust case against soon after his election that was Gores......called microsoft, will no longer sell Vista, nor XP (both will only be found on eBay etc) and we will find all new computers in August and September have Microsoft 7 operating systems. Not only can we not buy now from Best Buy but imagine having to update all (computers, software, etc) for a new operating system just because of lousy greed in Redmond Washington. It will fail even if the product is good. It sucks more out of the US population shipping it to where the manufacturing of the computers is: outside the USA. And why what is can not be made better is Microsoft has such minor competition.
G4 is out with Sprint. G5 is about the speed of cable data. Cable TV is needed for cable data. I called when I moved. Did I have a choice of providers? no. Just one. Just one line phone. And contract leases from Verizon and ATT. T-mobile later. 3 choices ....and cable is 99 a month 39 or 49 is TV which I do not want. So when G5 arrives, will dump cable for a G% wireless at half the cable cost. And listen to radio, and news and music. if I want TV direct satellite has so much more for so much less cost. And there are (ahem) two companies, DISH and Direct TV.
We also have two political parties. Mr Obama sir, this is our problem too. 2 parties is not democracy, two car companies is not competitive, one retailer is hardly competitive (oh yes, 80 cents are not spend in Walmart but who is the price setter? and the price taker?) Or microsoft. It is pathetic we have those trying to protect this democracy, this economy, which resembles China more than not, instead of those we say we detest, those Europeans, with competition, wealth available, shared risk in welfare, health, etc and killing us economically with 18 parties represented. Not 2. hell even Iran has 3 or more. Unreal. I remember Harry Browne's book ....something like "how I found freedom in an unfree world" by living on land he could grow food on, and eat. And live and that is where we are headed. We must redirect as in change direction, as the old system is a failure, and we must do so fast. Break up the banks into smaller chunks that can go down. And AIG. And all manner of the intelligence of Roosevelt (Teddy and Franklin) evend Nixon, Carter, Clinton and Obama who can see shared costs make life far far more inexpensive. With health we want the people to be the price setter. With software, with retail, with politics and with cable and all America we lost our anti trust division. Where it went is a RR great communicator mystery. But now we need it. And we need to let the parts we make from the whole be able to fail. Risk brings innovation and lower cost and competition. And those out there in offices shuffling papers (and honestly I dont really know what they do.....i would walk outside from the Chicago Merc, or Board of Trade after trading for 8 hours at 3 PM and wonder what the hell all those people did in those buildings all the time every day.
I still do. Bring back the 1934 securities act, the Glass Steagal act, and break up the logjam, banks love and keep us here. Short sighted banks. Short sighted monopolies in a democracy we want competition. In our legislators that deregulated us to hell and lowered taxes and will be going home when they raise them, but they must. And maybe next election instead of destruction of any new parties attempts, through lies or dirty tricks, we can find a way to change the laws to allow less than 5% of all registered voters to place a party and candidate on the ballots.
(in Illinois in any case.....different everywhere, some 10% ...
in a country where only 40% to 50% of the registered voters even vote, that is a tall order.....change it please).
And adding more and more laws is fun. Legislators appear to be doing things. But why not remove the old ones no longer valid in our time, all of which so archaic they are absurd, yet all can be dredged up to arrest anyone. Remind you of Iran? Of China?
We will be again, in recovery (from this economy and stupidity) when we are as cheap as Chinese labor. But, here is a hint to their success: THEY SUBSIDIZE ALL FROM FOOD, GAS, HOUSING, HEALTH, AND MORE.....we dont. That in China, and Europe, South America, etc....makes all the difference and Europeans love it we think they are slow. Russians doing well selling fuel to them. ....because the slower we think they are (and the more likely to fail) the lower the euro may be able to go as it is shutting down some (not all hardly) they are still net exporters, but for the UK....
and they have a secret. They are ok. They are not breaking up but adding to their size. They share. They have multiple parties in each country PLUS a governing parlimentary group that rotates, and will work until agreement is reached (considering the number of parties that is compromise....and competition)
And it works, in different ways in China, and in South America, OPEC someday in the ASEAN-4 (to be 8) and yet we think we are better. Obviously we are the ones in debt, the ones without a future any can see. And it is time to change our ways and fast before it is changed for us by our failing.
