Ugly. Criminally Ugly.

In less than 18 months forty percent of global wealth has evaporated. Poof!

http://www.reuters.com/article/wtMostRead/idUSTRE52966Z20090310

That makes me think that forty percent (or more) of global wealth was pure bullshit.

In basic terms, this global economic crisis started in the U.S. housing market. Back during the late nineties, Phil Graham, a Senator, wrote legislation which majorly reduced regulation in the mortgage industry. This paved the way for the housing bubble.

People's income started going flat back around 2000. This meant that the housing party was going to be over and that housing prices would stop their meteoric rise and start to fall a bit as demand cooled. ARM and NINJA to the rescue!

ARM, as most people know, stands for Adjustable Rate Mortgage. This is a loan where you initially pay a lower interest rate. At a later date (2 years later, usually) the rate would increase, making mortgage payments as much as double in some cases. Designed for house flipping and speculation, many people were caught with these loans when the housing market started cooling off. Unable to sell, the higher interest rates kicked in and their payments went through the roof. Foreclosures by the millions followed.

NINJA is a less known type of loan. The acronym stands for No Income No Job Applicant. This initially started as a way to sell homes to illegal immigrants who could not legally be employed in America. They had jobs, they just couldn't claim them on the paperwork. The NINJA loan became a way for mortgage brokers to sell to any-old-body. Make a terrible loan, get your commission, and let the recipient of the loan deal with the fallout.

All of this was bad... oh, yes... but the worst has yet to be explained. Any idiot, even a Wall Street executive, could see that these were risky loans. There had to be some other way to make money off these loans aside from the monthly mortgage payment... let's think here, boys...

What Wall Street came up with was nothing short of criminal. Wrap these mortgages up into securities, price them at 20-30 times their value, break up the mortgages and slice them and dice them ten ways to Sunday so no one could tell what securities fund was comprised of what mortgages (and at what terms/rates), insure them, get them rated AAA, and sell them on the global markets.

All of this required massive collusion. The insurers had to be in on it. The rating agencies had to be in on it. Banks had to be in on it. Wall Street had to be in on it.

Massive. Criminal. Fraud. Conspiracy.

And now we, as the American tax payer, are expected to bail out the top 1%. Bail out the bankers. Bail out the insurance giants. Bail out Wall Street. And yes, it is the top 1% who dreamed up these loans and how to insure, rate, and sell them to make more money off of smoke and mirrors. Yes, it is the wealthiest Americans who are almost solely to blame for this mess we're in.

To top it all off, these same people are balking at a tax increase to help cover the fallout! Rich motherfuckers. Most of these people haven't been poor for generations and they have no idea what is is to live hand to mouth. They have no idea what it is like to have to scrimp and save for what they want or need. They have no idea what damage they have done.

Detroit is different. I have no problem bailing out Detroit, and here's why:

Without auto manufacturing in America we are no longer a superpower.

Never mind the fact that GM, Ford, and Chrysler are also victims of Wall Street's greed and incompetence. They are suffering from a lack of demand. Most of the green initiatives they are pursuing started long before the downturn. The Chevy Volt is a good example. They were in the process of changing their faulty business models when the recession hit.

The simple fact of the matter is that auto manufacturing is a matter of national security. It is this industry which provides the backbone for military industrial might. No modern nation can be a superpower without this component. It is a prerequisite.

But the right is using this as an opportunity to attack the unions. Yes, evil unions! Oh, noooo! They are responsible for such evils as child labor laws, workplace safety regulations, the forty hour work week, retirement and health benefits, and the list goes on. Do your research. Before unions, labor was exploited. It was during this time of rampant exploitation of labor that communist and anarchist movements in this country took hold.

Few people know this, but there was an anarchist movement and a communist movement afoot in this nation which was very strong around the turn of the century (1900). Much of their gripe was with industrial exploitation of workers. Horrible and dangerous working conditions where children worked like slaves, the hours were as long as the boss demanded, and the compensation incredibly low. This movement in America even managed to assassinate a President! William McKinley, to be specific.

Oddly enough, once the labor movement in this country started to gain ground and improve conditions for workers, the base for these more violent and destructive movements began to dry up. So why is it that unions get such a bad rap in this country?

Essentially, you can blame it on Jimmy Hoffa and the infiltration of some union shops by the mob. Much of this, at least on the larger scales, was cleaned up by the Justice Department under the RICO Act. However, the taint of this corruption provided the necessary "in" for some elements within our political establishment to go after unions and demonize them.

These same elements persist to this day. They are politicians in the pocket of the captains of industry and finance. These same politicians are eager to bail out Wall Street (no questions asked) and defuse any blame that anyone tries to place at the feet of these captains. At the same time they make Detroit grovel for an amount that was roughly 5% of what they approved for Wall Street with no strings attached!

All I am saying is that we have been taken for a ride. We've been pumped and dumped. Forces are at work that favor the extremely wealthy and screw the middle class and poor. And many of us still don't see it!

The American Dream once meant an honest shot at a decent life for anyone who would work hard and play by the rules. It has been hijacked to mean "wealth and glamor", or wild success. It is no longer good enough to simply own your home, raise your family without hunger or desperation, and retire with dignity. Now you have to have your ride pimped, granite counter tops, and take deluxe vacations to have attained the "American Dream."

By hijacking the American Dream to mean "extreme wealth" we have been made to think that any policies that do not favor the wealthy above all others are somehow unAmerican. We are meant to believe that tax policies that shift wealth upwards are fine, but that tax policies that shift wealth to the middle class or poor are "class warfare" or socialism at work.

Let me tell you something - America has never experienced class warfare. The French Revolution was class warfare. The Russian Revolution was class warfare. The American Revolution was not class warfare. The elite and wealthy in America lead a revolution against the wealthy and elite of England.

In France the wealthy were carted off and executed en masse at the guillotine. In Russia the ruling class was exterminated like rats. And so I say to you again - America has never seen class warfare. The wealthy are terrified of it here because the wealthy never win at class warfare. They die like rats.

Am I saying we should start killing rich people? Hell no! I'm saying that the wealthy interests in this country are doing everything they can to rip us off, to squeeze every last drop of blood they can out of us, and at the same time stave off retribution at the hands of the masses. These chickens always come home to roost, however.

One thing that France and Russia both had in common was an autocratic regime that ignored the people and favored the wealthy to the exclusion of everyone else. America is different in that we have a democracy which is at least marginally responsive to the will of the People.

We have flirted with open class warfare in the past and we were brought back from the brink by people like Teddy Roosevelt (Republican - trust busting) and Franklin Roosevelt (Democrat - New Deal). Regardless of whether or not you feel these initiatives were worthwhile or not, they altered public perception of the landscape and brought us back from potentially huge civil unrest as a result of the lower classes rebelling at their lot in society.

In both cases (trust busting and the New Deal), the public was outraged by the abuses of the wealthy. At the turn of the century it was the robber barons and industrial titans like Carnegie, Rockefeller, and Schwab who used the Pinkertons and like methods to brutally suppress worker strikes and unionization.

In 1929, short selling and abuses on the stock market were the cause of massive hardships in this nation. Forces beyond the average man's control had ruined his life and they were rightly angered by this. These forces were again comprised of those who had wealth and wanted more and more and more and more.

Forty percent of world wealth lost. The poorest among us always bear the heaviest brunt of these downturns. Historically, when the better educated middle class starts to feel the pinch is when things get ugly. They "rouse the rabble", as it were, and with numbers they break the back of the wealthy establishment and, at least, force concessions.

So let's all pull together before it gets that bad, eh? We're rocketing in that direction, if you hadn't noticed. How many people do you know who have lost a home, a job, or both? I am lucky in that I live in Charlottesville. Between the University of Virginia, hospitals, NGIC, and other agencies and industries our area only tends to get hit by the worst recessions.

I will tell you one thing, however... I walk to work every day right through our downtown and Main Street areas and I've been seeing a noticeable uptick in the number of homeless people or people begging for change. Old ladies living in tents, people pushing shopping carts around picking up cans, disabled people in wheel chairs on the Mall asking for money.

It's getting ugly.

Two Great Articles

Poverty Of Imagination - /// - President's Day

Both of the above articles are by Jim Kunstler. Excellent reads... He is about as close as anyone has come to encapsulating my own personally held views concerning the impending "realignment" the world is in for.

Class Warfare? Yes, and We're Losing...

http://www.reuters.com/article/topNews/idUSTRE50T11420090130

This makes my blood boil. $14 B in bonuses paid while receiving taxpayer money to bail them out of gigantic losses? How is this possible?!

The last eight years have represented a major redistribution of wealth from the bottom and middle to the top. Millionaires have turned to billionaires and billionaires have become even more filthy rich. All the while the middle class has shrunk, poverty grown, wages stagnated, and expenses skyrocketed.

Maybe when they empty Gitmo of terrorism suspects they should fill it with robber baron CEOs. Fucking thieves!! They run their companies into the ground and still get billions in bonuses?! How the hell can any bonus be justified when they are laying employees off and losing money? My head is spinning... how can we tolerate this?

Thieves! Thieves! Oh, Christ! I'm infuriated. The only thing these guys are good at is stealing! They are incapable of running a company with competence, but man can they steal! Please explain to me how this is anything but out and out thievery. They get our money and put it in their pockets.

All the while the average American is losing their job, their home, their dignity, their healthcare... We are losing EVERYTHING, and these guys are getting even more rich!

How much damned money do they need? And to top it off they are utterly shameless about it. CitiGroup just was caught buying another corporate jet for $50 million. They didn't even have the decency to buy and American made jet (it was French) !! This after receiving $45B in taxpayer bailout money!

Shameless thievery!! Please, someone tell me why these guys shouldn't be strung up in the public square by their tender parts! I'm almost serious about this. In my mind this is nearly treasonous.

The nation is in dire financial straits and these guys are conducting business as usual - heaping money stolen from the public coffers on themselves, buying more jets and sacrificing nothing themsleves whilst laying off employees. The later of which has the effect of removing that much more money from the hands of consumers which further undercuts the segment of the economy (consumer spending) which accounts for 2/3 of all economic activity in our nation.

On top of it all, they get to keep their jobs!!! This blows my mind. If it weren't for these "economic geniuses" repackaging shaky mortgages into securities and selling them at 20-30 time their capitalization, we wouldn't be in this mess! They perpetrated fraud and then when the house of cards collapsed they got your money, my money, our money and proceeded to use it not to save jobs, not to keep credit flowing, but to put in their pockets!

Thank God I don't live anywhere near Wall Street. I'm so mad right now I just might do something stupid...

Brick Controversy

Here in Charlottesville we have something called the Downtown Mall. This was once East Main Street, a two-lane street lined with shops and restaraunts. Very classic Americana Main Street.

I think it was 1979 (I could be wrong) when business was slumping on East Main Street and doing better in the new mall built on the Rt. 29 side of town. This new mall was a typical urban sprawl type development centered around the automobile.

So the city was faced with a problem: Main Street was obviously failing and many of the businesses on East Main were very close to closing down. So what to do?

Answer? Brick the street in, add some fountains, and turn the entire length of East Main into a pedestrian mall. Roll the clock forward thirty years and it is a model for urban renewal that has been emulated by Portland, Raleigh, and others. It's especially beautiful in the spring and early summer when the trees are in bloom, shading the patio dining areas for the various restaraunts. People fill the Mall most of these idyllic days and the vibe is very relaxed.

Also add thirty years of wear on the bricks. Toss in there obnoxiously drunk college girls snapping off the heels on their $200 ho-heels in between bricks and you have a call to action. Rebrick the Downtown Mall! Price tag? Nine million dollars.

At first I was pretty outraged. Nine million dollars!? Are you freakin' kidding me? In these hard financial times you're going to spend nine million tax payer dollars on rebricking a mall that doesn't really need it? I mean, there were some cracks and some bricks did need to be replaced, yes, but the whole mall didn't need to be rebricked.

Now I'm actually in favor of the idea. I was running an errand on the Mall the other day and I saw some construction workers on break. They were sitting around eating food from one of the restaraunts. One walked out of the CVS packing a pack of cigarettes against his palm.
Then it hit me: this is exactly the wrong time to can such a project. It has already been paid for. Who knows if this construction company has another gig lined up? These are guys who are gainfully employed on a project that reinvests in a community asset.

And they're doing it smarter this time. I'm no bricklayer or mason, but supposedly the method of bricking the Mall this time will be different. It is supposed to last much longer than the original method used.

But, in typical Charlottesville fashion, people have their panties all in a bunch. They fought the original idea of transforming East Main Street back in 1979. Now the Downtown Mall is credited with saving Charlottesville's downtown area and is the major social and commercial venue in the city proper. People mocked the city councilman who championed the 250 Bypass. Anyone who knows Charlottesville can imagine what a nightmare crosstown traffic would be if it weren't for the 250 Bypass.

Calm down people. It's an upgrade to a vital city resource and it's providing jobs in tough times.

Capitalists and Socialists

Where my free market capitalists at? What! What!

Where my socialists at? What! What!

Screw all you guys and your weak knees! Both of these groups are being wishy-washy and failing to have the courage of their own "convictions."

If you're a free market advocate then you have to be against any intervention by the government to save capitalism from itself. Let the chips fall where they may. Destruction is but the dawn of creation, right? Out of the ashes new enterprises will rise... stronger, leaner, more competitive. Innovation will save the day!

I don't see anyone espousing these ideas.

Stop snickering, you socialists! You don't even have the balls to openly call yourselves socialists! Ha! A real socialist would be standing in front of every mic and every camera screaming at America to wake up! Unbridled capitalism has failed you! Again! Nationalize the banks! Nationalize the automotive industry! And I don't mean these half-assed "bridge loans" or "bailouts", either. A socialist would advocate for open and total government control of these failed institutions. And don't kid yourselves - these are most definitely failed institutions. The writing has been on the wall for years and either through paralysis or willful blindness they failed to act in advance to save themselves.

Again - no one is openly advocating the government takeover of the means of production and capital.

Free market capitalists say "Ho!!"

<crickets>

Socialists say "Ho!!"

<crickets>

Hmmm... Maybe there are no real socialists or free market capitalists after all? Or not many, at least. In my humble opinion, we should go "all in" one way or the other. I'm tired of these half-measures that keep this crap limping along as-is.

In all honesty, our economy is a mixture of socialism and free market capitalism with a bit of a lean towards the free-market side of the equation.

So what do you want? The slow growth and predictable hum-drum of socialism or the roller coaster ride of boom and bust that is free market capitalism? There's no perfect economic formula, people. It just doesn't exist.

I just wish we'd be done with this - either we commit to an ideology and let that go where it may or we can drag this global economic collapse out for years and years and years. If we truly committed to an ideology, we could at least know once and for all which works and which doesn't...

Me, personally, I'd like to see it all go down the toilet. I have a feeling that's what's going to happen no matter what government does.

Life and existence in general resemble both systems, in some ways. Life is all about death and rebirth: the boom and bust of free market capitalism. Life also carries on - the more things change the more they stay the same: the safety net and static nature of socialism.

So what the hell? Let's try one of them out for once!

I Should Be An Economist...

Here's a great article on Reuters concerning how close we may be to another Great Depression:

http://www.reuters.com/article/newsOne/idUSTRE5077TM20090109

Why should I be an economist? I've been saying almost the exact same things as are in this article for around a year. Particularly the point about how the unemployment numbers these days are calculated as compared to how they were calculated in the 1930's (i.e. today they are parsed to make unemployment look lower).

If you search this blog for the word "depression" you will see six entries dating back as far as early June 2008. If you know me, you'll know that I have talked about our proximity to another depression for at least a year. Hmmm - right around the time that this long recession began.

Trouble South of the Border

Mexico has popped up rather prominently on the Joint Operating Environment 2008 report. This is a report published by the United States Joint Forces Command, the military command in charge of almost all conventional forces in the continental U.S.

This report warns of the possible rapid collapse of our neighbors to the south. Currently, towns on the border between the U.S. and Mexico are riddled with violence. Battles between drug cartels and between these cartels and government forces have left these towns in a defacto "failed" cities with little actual authority being exercised from Mexico City. "Failed" being the more palatable word for "anarchy."

Daily security for Mexican citizens is a nightmare in these failed towns. Kidnapping, political corruption, and common crime are nearly unchecked. Given Mexico's 2000 mile border with America and the proximity of the epicenter of this crisis to that border, it is not inconceivable that a refugee crisis could emerge in the near future sending thousands and thousands of Mexican nationals to America seeking safety.

Add this strain to an already historically weak U.S. economy and you have the potential for a crisis to which the government may not be able to effectively respond. If Mexico as a whole fails, this will almost certainly require U.S. intervention. What form this intervention could or would take is uncertain.

What is certain is that any U.S. intervention that involved ground troops, even if only utilized as peacekeepers, would spark grassroots resistance. This resistance may even take on a criminal aspect as the drug cartels would probably prefer a weak Mexican government to any sort of peacekeeping operation with its checkpoints and US/UN soldiers milling about. The prospect of such a hostile environment towards drug running may cause various cartels and criminal gangs to unite.

This is all gross speculation on my part, of course. I don't, however, think that what I have speculated about is beyond the realm of possibility. These days entering failed states (or entering a functioning state and toppling it) is messy, messy business. Iraq and Afghanistan are all the examples you need. Afghanistan had failed before we entered and Iraq afterwards. In both cases our soldiers there are mired down in a political, religious, and sectarian bog from which there is no clear-cut path to victory.

America must learn its lesson from Iraq. We failed to learn the lesson of the defeat we inflicted on the Soviets in Afghanistan during their invasion. The lesson is this: A low intensity, low-cost war waged by guerrilla fighters can bog down the world's best militaries, causing massive financial strain on the invading nation's economy.

This is how the Soviets were laid low and may yet be a very central contributing factor to how America is laid low. This relates to Mexico in that if we manage to extract ourselves from Iraq and Afghanistan without destroying ourselves in the process, it would be pouring gas on the fire to then go and repeat the same mistake in Mexico.

Annexation of Mexico wouldn't work for a variety of reasons. One of the primary reasons would be that if Mexico were made into a state or a series of states within our union, then there would be no restriction on travel for millions of poor and dispossessed Mexicans to travel north looking for opportunity. The infrastructure disparities between the two nations alone would be daunting.
West Germany had a much easier proposition in absorbing East Germany. While German Unification certainly was not easy, they at least had the advantage of a common language and culture from which to start.

No, a failed Mexico is a giant shit sandwich that America would be virtually alone in having to eat.

Mindset

Let me be clear about the way I view our future and why I consider myself a survivalist... and for that matter, what I think of when I use a word like "survivalist."

The Future

Succinctly put, it's bleak. We've seen two million jobs evaporate this last year alone. Our manufacturing base is in serious trouble. Banks are clamming up with the credit and all our economy does is consume, consume, consume. We make nothing.

Politicians are more interested in scoring short term political victories than laying the foundation for long term sustainability and growth. The term "mortgaging our children's future" is such a cliche these days that the poignant image it is meant to convey is utterly lost. In short, politicians are long on gathering power und to themselves, and very short on actual, real leadership.

Our leaders, be they corporate or government, are no longer expected to produce results. They are bailed out or golden parachuted or pardoned when they fail or even commit criminal acts. There is no accountability. The meritocracy that once made this nation great is no longer. Our democratic ideals are dying out in favor of a nouveau nobility. Kennedys, Clintons, Bushes, and more.

Our executives in the governmental realm behave more like kings than officers of the public trust. Our corporate chiefs act like spoiled children of nobility who are given a small fiefdom to run... often into the ground. Corporate boards are comprised of executives from other, often competing, companies. One CEO may have a board whose members are CEOs at companies whose boards on which they themselves serve. Can anyone say mutual masturbation?

Our leaders are modern day robber barons; thieves, confidence men, and thugs. I mean that with no poetry and in all ways literally. We have yet to see the Obama Administration in action, of course. While I am allowing myself to hope a bit, I know history too well to get my hopes too high. Washington has a way of changing those who mean to come to town and root out the rotten core of our government.

The momentum of this financial crisis has not slowed one bit. No one talks about this, but the wars in Iraq and Afghanistan are as much to blame for our financial problems as the mortgage crisis. The defecits we run (roughly $400 billion a year for the last few years) do not count the cost of the wars we are engaged in. They are funded with emergency supplemental spending bills - off books. The true defecits we have been running are north of half a trillion dollars a year.

Do you hear that sound? It sounds like a giant toilet flushing... and we're on our way out with the crap.

"Survivalist"

This word is oft maligned as meaning "gun nut", "militia freak", "racial supremacist", "radical", or "wingnut." This is not what the word means to most of the community.

While I am not a prominent member of the survivalist community, I do consider myself a survivalist. To me the word "survivalism" means, in its most basic form, "preparedness." So to be a survivalist means to be someone who is prepared or who strives to be prepared for the day when the trucks stop delivering me my food and when the lights go out.

To be honest, no one can foresee exactly what shape the coming gridcrash will take. Will the markets melt down and banks fail causing currencies around the globe to go into a hyper-deflationary spiral? Will there be an attack on Washington which will cause a lapse in centralized authority leading to riots born of panic? Or will budget shortfalls in the fed, state, and local levels coupled with high unemployment cause government to essentially be ineffective and overwhelmed leading to defacto anarchy? We saw how well the fed responded to a disaster like Katrina. Or, on the radical end of the spectrum, will a bug escape some Army lab and wipe out 90% of the world a la Stephen King's The Stand (minus the supernatural stuff)?

The point of the last paragraph is to say that there's no telling how, or even if, the shit will truly hit the fan. How does that influence the survivalist's mindset? I can't speak for others, but for me it means having a flexible, generalized plan that can handle as many eventualities as possible. It means learning a whole metric ass ton of information on the basics:

• Prioritization - What must you have? What can you do without if you had to? What do you do first?
• Water - Treatment and sourcing
• First Aid - Not bleeding to death
• Growing and Storing Food - Gardening, composting, and food preservation
• Hunting - When the supermarket runs out of meat, you'll need to hunt, kill, and prepare game of some sort. This will be especially important years when your garden's yield is less than expected
• Sanitation - Getting rid of waste and possibly using it as compost
• Energy Engineering - When the lights go out, can you get them back on? Can you setup a wind turbine? Could you construct one? How about biodiesel? A tractor would make that farm way more productive...
• Outdoorsmanship - If you had to spend a night outdoors in the winter, could you? How about a week? A month?
• Gunsmithing and Marksmanship - Fixing, cleaning, and shooting guns
• Construction - If a tree falls on your roof and knocks a hole in it, could you repair it?
• Brewing - Making your own beer, because what the hell is life without beer?

Just think of all the stuff you call on others to do. Do you have even the slightest clue how to do that yourself? Some things will just go away. For most, electricity will simply be gone or could be unreliable, at best. How will you preserve your food without the handy-dandy refrigerator?

Not too long ago we knew how to take care of ourselves. My grandparents canned food from their garden and so did my father and mother. They didn't do it because they were poor and had to, either. To the contrary, my grandparents and parents were on the more afluent side of the middle class. Our great-grandparents didn't have refrigerators and it was a way of life for them to grow food and preserve it themselves.

In hard times, can you trust the cop who hasn't been paid in two months? They may be in as tough or tougher a bind than you are (more likely the latter). They are just like you except they have authority and a gun. I have to admit, if my family were hurting and I had the gun and authority, I'd be sorely tempted to use it to my family's advantage.

A survivalist, in short, does not take for granted the notion that the cushy comforts of modern life will always be there. In many ways, a survivalist is a rationalist. Look at our economy. Unsustainable and obviously broken on a fundamental level. Look at our energy consumption habits. Unsustainable and terrible for our environment. Look at our modern society. Stupid, lazy, and isolated with no signs of improvement. Look at our leadership. Incompetent and corrupt.

Who wouldn't be concerned? Who wouldn't look at all of that and wonder when we'll reach the tipping point which brings it all crashing down? A survivalist is someone who sees the big picture and resolves to not be a victim. A survivalist may be your savior one day...

Ex-Commie Doom Prognostication

A Russian bloke by the name of Igor Panarin predicts that the U.S. will disintegrate by 2010. I'm not sure that I completely buy his prediction on how things will go down, but I do think it's interesting that notable people moving in high circles could openly espouse such an idea.

Reading a bit about him I see that he's basically a Russian talking head - like one of our Sunday morning pundits. According to one site, he moves around in Kremlin circles quite a bit, so maybe he's a step above punditry.

He's also a professor and published author. Okay - maybe two steps above punditry, seeing that many TV pundits in this country have no more qualifications than hosting a radio talk show in Albuquerque and a high school diploma. On slow news days the 24 hour news channels will probably put you on with just a diploma.

In any event, for an apocalypse junkie like me this is interesting stuff.

Gridcrash

We are teetering on the edge, my friends. The auto industry nearly collapsed, and still may in the near future. Three million jobs down the toilet - nearly. Can you imagine the fallout from that?

• Three million people (nearly all at once) added to the already bulging unemployment rolls.
• Three million more people without any health insurance...
• Three million more people with drastically reduced buying power. A real problem since our economy is fueled 2/3 by consumer spending and all.
• Hundreds of thousands more foreclosures in relatively short order... this could have easily sent an already weak new housing market into oblivion.
• The possible collapse of foreign automakers' operations in North America. All of these companies worked with the same suppliers that would have gone out of business if GM, Chrysler, and Ford went down. How many more people would that have put out of work?
• Repeat all steps above as service industries related to auto plants, parts, dealerships, etc fold - everything from fast food joints, to stores, to office supply companies, etc, etc, etc.

We are staring economic oblivion right in the face. If you haven't woken up to just how close we are to another Great Depression, then you need to pay attention. The Fed finally admitted to a recession dating back to December 2007. As of the very moment of that announcement, we were in the longest running economic downturn since - you guessed it - the Great Depression.

Each new day we wake up still in this recession is another day added to the record of the longest recession ever. Most economists think there is no chance we'll come out of this in 2009.

Once the mightiest manufacturing sector the human race had ever seen - the Big Three - now is reduced to begging for taxpayer money like some homeless child. What's worse is that the guys who got us into this mess, Wall Street, came asking for twenty times as much money and got it without so much as a batted eyelash.

Let someone who actually makes something come ask for a paltry sum in comparison and it's like the Spanish Inquisition. What does that say about us? It says if you're white collar and take a shower before you go to work, then you can do no wrong. Be as greedy, corrupt, and stupid as you want - we'll bail you out no questions asked.

But if your collar is blue and you shower after you get off work, then expect to be demonized when you come asking for a loan. Expect to be treated with suspicion. Why? Because we don't respect hard, honest work these days. We respect money, and the making of it, above all else.

We respect it above hard work.

We respect money more than honesty.

We respect the acquisition of wealth no matter the means.

In short, we are sick. We have lost our center - and I don't mean that in any sort of religious manner. I don't mean that with any political bent whatsoever. I mean that when we don't respect that which made us great, then we will be great no longer.

Hard work and opportunity used to be at the center of the American ethic. We no longer respect hard work in and of itself and I fear that the same opportunities that were afforded me coming up will no longer be available or attainable to my children.

Why? Because the wealthy and elite have been allowed to run our ship aground - again. The difference is that back in 1930 people actually lived closer to the land, They knew how to darn socks and plant crops and raise animals. Many didn't have electricity.

Nowadays the dispossessed will not know what to do when there's no supermarket. They won't believe any of it until it's already happened - until the lights actually go out.

Well, my friends - I am not one of those people. I have a piece of land to retreat to when the sh!t hits the fan. This land has a source of clean water - a source spring. I have guns and seeds. I have the skills needed to protect my own (first aid, CPR, marksmanship). I have the skills needed to provide for my own (hunting, fishing, basic gunsmithing, gardening, construction, electrical engineering). I have a library of books dedicated to things like making drinking water safe, emergency shelter, gardening without petroleum fertilizers and pesticides, composting, shelter, and more.

Batton down the hatches. Gridcrash is a-coming.

Camping, Shooting, and the Decline of America

A bit of a scattershot entry here, but what the hell?

• The Vice President of the United States admits to the world to authorizing torture
• Chrysler shuts down all plants for a month

Oh, God. We've really and objectively gone to hell in a handbasket.

In that spirit, I am going shooting with my brother and kids this weekend. A .45 or two, maybe a .357, and my .22 Ruger will be in the mix.

I'm trying to setup a camping trip with a couple of my brothers and maybe some friends for some time this winter. We'll probably camp on the back portion of my parents' property in Barboursville.

I really want to try out some of my camping gear which I just haven't gotten a chance to use yet.

WTF Have I Been Saying?

Notice what year 2008 ranks in there with? 1931. The worst year for the S&P ever... worse than 1929, for Christ's sake.

You'll have to click the image to get a full sized version to read it well.

Prognostication

Let me tell you something here - if the US Auto Industry collapses then I officially deem this nation no longer a superpower. The long ride we've had as a preeminant global force will be done with if the industry that won World War II for us goes away.

There was a scene from Band of Brothers that leaps to mind where Webster (along with the 101st Airborne Division) is riding in the back of a long convoy of trucks along a highway where 300,000 German POWs are marching in the median going the other way.

They are walking and riding in horse-drawn carts and Webster screams at them, "What were you thinking!? Look at you! You have horses!! Say hello to Ford and General Motors! You ignorant, servile scum! What are we doing here? You interrupted our lives for this?!?!"

The idea that a nation could attempt to dominate the modern world on horseback was preposterous.

Our manufacturing base is without a doubt the central cog in our military machine. The auto industry is the wheel upon which almost all teeth in the industrial cog are mounted. When that goes, the last of anything we actually make is sure to soon follow.

A Year Late, A Couple of Trillion Dollars Short

The National Bureau of Economic Research finally declared a recession this week. Fucking genius, fellas. I guess what we've all known for, oh, about a year is now "official."

Thanks. Good to know you're on top of this for us.

Gut Punch Correction

(Click for larger image)

Slight correction from yesterday. It seems the Dow has lost 42% (rather than 40%) of it's value from its high on October 9th, 2007 of 14,164 down to its low of 8,175 as of October 27th, 2008.

Gut Punch

516,000 jobless claims last month.

http://www.reuters.com/article/newsOne/idUSTRE4AC40B20081113

Dow Jones Industrial Average down 411 points yesterday. The Dow has lost over 40% of it's value from its high.

No sign of it stopping, either.

Batton down the hatches people.

The Grim Reaper of Greed

alternate title - Power Word Kill Rich Whitey

Recession Finally Admitted by the Fed

Finally there are rumblings from Washington that seem to admit to a recession. I think the American people have been tuned into the reality of an economic downturn for quite some time.

As of now, the Dow is down another 502 points. The other day it was up by around 900, but I knew that was mere volatility. This downturn won't stop until the actual fundamentals of the world economy are repaired.

The U.S. especially needs to put its economic house in order. We need to start making things again. That is what is fundamentally at the core of our floundering economy - we don't make anything any more. We make money off of money. We flip houses. We use credit.

There are many things that have gone awry, don't get me wrong. However, increasing manufacturing jobs in America would have the effect of decreasing unemployment, putting more money in the pocket of Americans. Two thirds of our economy is based upon consumer spending.

I think retail stores are going to take a major hit this Christmas. Americans are losing their jobs, their homes, and their confidence. Watch the stock market in late December and early January. Look for a big drop when the retail numbers prove to be abysmal.

I think the turnaround here will take a good long time. I think Americans have been shocked into waking up from a credit card coma. Spending will slow. Savings will increase. Less cheap crap will be bought in stores. Bad news for China, really.

If Americans are smart and we have good leadership we can come through this better and stronger. If the focus is on technology and research into alternative energy we have a chance. If America leads the way with a whole new fleet of battery driven and alternatively fueled cars we can again be the auto manufacturer of the world. If we invest in infrastructure like schools, roads, a new solar and wind electrical grid, and college we can again become competitive.

If our leaders have the political will to raise taxes we might be okay. If we are honest with ourselves then we see that raising taxes is unavoidable if we are to address our national debt and other needs simultaneously. If Americans can change their ways and refrain from spending what they don't have then each of us may yet find economic salvation.

If we hold our leaders accountable on the issues that matter to all of us we can save ourselves from ourselves. Issues like education, roads, jobs, a stagnating economy, and the environment are all interrelated and can all be solved on a single line of attack.

The simplest answer is usually the best answer. I usually denounce Occum's Razor as a means for oversimplification of complicated issues and ideas. In this case, however it is right on.

Problems like crumbling roads, vaporizing jobs and a worsening environment can all be solved by investing in green technology and providing government subsidies for green infrastructure projects. This would lay the foundation for jobs and a revitalized economy. It would allow us to export this technology and put America back on the economic map as a producer and exporter rather than an importer and borrower.

More Americans with good jobs boosts consumer confidence and provides the fuel for two thirds of our economy (consumer spending). More good jobs means a larger tax base. Government subsidies for technology research means many many small businesses getting startup money from either the government or venture capitalists.

And to cement the continued growth of this new economy you invest in education. A smart workforce is an efficient and innovative workforce. You also ensure this new boom is sustainable with massive infrastructure investment in both existing and new techologies (as they come online). Improve roads and build a new sustainable electrical grid. This will create jobs in and of itself as well - this will feed back into the positive cycle by putting more money in the pockets of Americans and growing the middle class.

That is a lot of "ifs." Believe me, I am aware of that fact. Every pay period I am putting a little bit towards survival gear and supplies. I am trying to hope for the best, but I am planning for the worst without a doubt.

EDIT: At close of trading today the Dow was down 733 pts.

Chaos Reigns

• Wells Fargo slipped 3.7 percent
• The S&P financial services companies' index fell 5.6 percent
• Bank of America fell 4.6 percent
• The Dow fell below 10,000 for the first time since October 2004
• JPMorgan Chase slid 5.7 percent
• Shares of energy companies were a top drag, with the S&P energy index down more than 7 percent
• Shares of Exxon Mobil Corp fell 1.2 percent
• Chevron Corp lost 4.7 percent
• Shares of economic bellwethers ... General Electric ... shares dropped 5.2 percent
  

And now the wolves are fighting over the carcasses strewn everywhere. This from Reuters...

"Citigroup said it is suing Wachovia and Wells Fargo, and it is seeking more than $60 billion in damages over Wells Fargo's competing bid for Wachovia."

FUCKING CHAOS REIGNS!!!!!

The Butt-Rape of Main Street

Mao Tse-Tung and Lenin might have been on to something. How many times do we have to be screwed by the titans of industry before we wake up? When does enough become enough? When do we pick up the gun?

I'm not advocating it - not yet. I'm just wondering when it is that people get so fed up with the bullshit being shoved down their throat by Washington and Wall Street that they go armed into the streets. Bullshit like:

1. "We can't have national healthcare because it's too expensive. But you sure as hell better cough up a $700 billion bailout in just a few days!"
2. "Bankrupt due to medical bills? Well, see we just made it easier for the hospitals to take your house. Oh, you're welcome!"
3. "We have to cut education spending because we just can't afford it. We have this $10 billion a month war of choice we have to fund."
4. "Sorry about college being unattainably expensive, but we just can't afford to help you with that. See, we have these regulations we need to loosen and then we'll be cutting the taxes on those who benefit from that deregulation."
5. "Hey, remember how I outsourced your jobs and stagnated your wages? Yeah, haha! Good times. Hey, I got real fucking stoned and was doing some plain retarded stuff with that mortgage I sold you... yeah, yeah. I repackaged it and sold it for like 20 times what it's worth. Hey... I need to jack your payment by like 120% to try to cover my losses."

These same guys that have had Main Street bent over the barrel, slapping us in the face with the cock of outsourcing and donkey-punching us with stagnant wages now want us to pay the bill for this date rape.

Wall Street to a crying Main Street, skirt torn and dirty: "Hey, sorry I punched you in the fucking mouth, called you a 'whiner', and then ass-raped you in the alley behind the restaraunt I told you we'd eat at. Who am I kidding? I'm not sorry for that. I actually ended up taking Congress out to dinner, Main Street. Yeah - I know you're bleeding, but I need you to pay for my date with Congress. Yeah, and you better pay right now or things will get fucking awful."

Fuck them. No matter what there's going to be pain - bailout or no. There was a bailout during the Great Depression and the Depression still happened. Fuck these assholes. Let them all lie in the bed they've made. Let the chips fall where they may and we'll just have to deal with the fallout.

We don't even know if the bailout will help. This is the actual consensus of the economic intelligensia. They admit it. How did they come up with $700 billion as the pricetag for this bailout? Just a guess...

Grrrarrrr! I could just scream. Nah - I'll go shooting instead.