Where is the US economy headed?

@spendius,

Save okie the bother? ROFL

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Lehman Brothers, the 4th largest US investment house, will be making some major news Wednesday @ 7:30 am ET. A rather unprecedented time. Expect another bad quarterly report (a loss of perhaps $5 Billion) and perhaps some news of a takeover by some other instituition.

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@realjohnboy,

rjb, As I've assumed, I believe there are going to be many more mortgage/financial institutions going bankrupt for the next year or so.

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@realjohnboy,

Quote:

Lehman Brothers, the 4th largest US investment house, will be making some major news Wednesday @ 7:30 am ET. A rather unprecedented time. Expect another bad quarterly report (a loss of perhaps $5 Billion) and perhaps some news of a takeover by some other instituition

most likely this:

Quote:

U.S. District Judge Melinda Harmon in Houston, Texas, approved the plan Monday. Harmon also granted attorneys' fees in the amount of 9.52 percent of the recovery, or approximately $688 million, plus interest.

"We're pleased that the court recognizes the tremendous amount of work, skill and determination required to overcome significant obstacles in this complicated case and recover over $7 billion for defrauded investors," said the attorney for the lead plaintiffs, Patrick Coughlin of Coughlin Stoia Geller Rudman & Robbins LLP.

The settlement includes payments of $2.4 billion from CIBC, $2.2 billion from JPMorgan Chase and $2 billion from Citigroup, according to court documents. Smaller amounts come from Arthur Andersen, Lehman and Bank of America.

http://www.cnn.com/2008/US/09/09/enron.settlement/index.html

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@hawkeye10,

nope

Quote:

Battered Lehman to announce 'key' initiatives

NEW YORK (AP) _ Lehman Brothers Holdings Inc. will roll out plans Wednesday to shore up the embattled investment bank's balance sheet and face down investor concern that it's running out of options to raise badly needed capital. The nation's fourth-largest securities firm, whose shares fell by nearly half on Tuesday to a decade low, is said to be ironing out a deal to sell or spin-off its prized investment management business. Lehman is also looking to raise cash through the sale of devalued mortgage assets.

http://news.ino.com/headlines/?newsid=68933736681790

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@hawkeye10,

You may be right, hawkeye, but I am sticking to my hunch that Lehman will announce it is selling off much or all of itself after taking another big writedown in its loan portfolio ($4-5 Billion). We shall see tomorrow morning. Thanks for joining in here, by the way. There are few participants in the Economy threads, and some of them aren't really very nice.

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@cicerone imposter,

cicerone imposter wrote:

What's your point?

My point is we better get busy in all kinds of ways, like drill here and drill now for one example, unless people are prepared to accept a lower standard of living. I don't think they are, and politicians aren't inclined to believe we should either. Also, the little graph, anytime energy usage drops off, it coincides with a downturn in the economy. Oil, or energy, is the fuel of everything that is happening. Until we find a replacement, I think we better get busy. Elect McCain Palin.

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@realjohnboy,

You obviously don't get around Johnboy, I am widely considered to be a very unsavoury character....but thanks.

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@okie,

Fair enough, but this election is not about one issue (energy). It's about a) our economy, b) iraq war, c) higher cost of fuel and food, d) jobs, e) higher cost of health care, and f) millions losing their homes.

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@cicerone imposter,

Energy is a biggee, ci, probably the biggest. This country got to where it is, based upon cheap abundant energy.

Also, we cannot continue to tax business exorbitantly if we expect to compete in the world. Commerce provides jobs. Without commerce, no jobs, simple as that. We need to get busy. Oh one other thing, we have millions of illegals not paying all the proper taxes. Ho humm, we need to get busy. We need somebody to shake up Washington, big time, not more of the same old tired worn out policies, as Obama advocates. Change, ha, I heard all of his laundry list, and its more of the same that got us into this pickle. A democratic Congress for 40 years, and finally a Republican and we balanced the budget, but now we are back to the same old tired worn out spending policies. And yes, I agree, we need to quit spending money in Iraq.

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@okie,

okie, No doubt energy is a biggie, but it's not the primary issue of our times. I know that you conservatives haven't been paying more for energy and food, haven't lost your jobs or homes, and still have your health insurance, but our banks are going broke, the US dollar has lost value across the world, and the unemployment rate is growing by the thousands every month. Without a job, energy is the least of our problems. It means no house or food.

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@hawkeye10,

Oh, I do get around more than you think, Hawkeye. I may disagree with you on some aspect of economics, but I would never be disrespectful of you on a thread such as this one.
I disagree with Okie on his "drill, drill, drill" mentality. But I hope that, if I take the time to try to ask him a question, he will take the time to think about a cogent answer. So far, that has happened. And I appreciate it.
It seems to me that there are threads where, sort of by design, folks trash-talk. That is fine. I hope there are other threads where we can ask each other honest questions and get honest answers without rancor.

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@cicerone imposter,

ci, I think cheap and abundant energy drives commerce, it makes us more competitive in the world, and that is what provides jobs. We are losing jobs because we are not competing as well. No getting around it. If we continue to pay other countries for all of our goods, then our money goes there to provide jobs for them instead of here. We need to turn that around. Hello, get rid of corporate and business income tax, for starters.

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@okie,

okie, Cheap and abundant energy does not drive commerce; it's called quality products and services at competitive prices. FYI, most countries have been paying over $4/gallon for gas for more than a decade while we were paying less than $2/gallon, and they have competed very well in the world marketplace, thank you.

Japan and Germany does not have any oil wells, yet they have been number two and number three strongest economy in the world for many decades.

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@cicerone imposter,

Okay, but are Americans willing to live like the Japanese or Germans?

Sure, fuel prices is only one piece of the puzzle, but its an important one, a very important one. If all other factors remain the same, increasing fuel price and tightening supply will squeeze economic growth, I don't think you can dispute that?

I have never said there aren't other factors, things like a burdensome tax policy on businesses, illegal immigrants driving wage scales down and taking jobs while not paying full share of the taxes, unions driving business out of business or overseas, overburdensome government regulation here that drives business overseas, environmental groups obstructing businesses, burdensome lawsuits here in this country, the list is pretty long. And need I say that alot of those burdens have been worsened by liberal policies by the Democrats and their supporters, such as trial lawyers, environmental groups, unions, etc.

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Quote:

Washington Mutual, the country’s biggest savings and loan, watched its stock fall 29.39 percent on Wednesday to $2.33, signaling that the company’s recent executive shake-up may not have been enough to placate anxious investors.

http://www.nytimes.com/2008/09/11/business/11bank.html?_r=1&oref=slogin

WM was above $40 a share a late as last year, now the stock is virtually worthless. Near as I can tell they hold assets with a book value of $300 billion, so the dismantling of this company will be traumatic. Not to mention that they employ 40,000+, most of whom I expect will be out of work.

Stick a fork in WM, they are done.

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@hawkeye10,

They'll just get a new name Hawk.

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@spendius,

I think it unlikely that anyone would buy their assets in a block (too many real estate positions with lots of risk left in them)....unless the feds guaranty them, which is certainly possibly as we continue to socialize our financial system.

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@hawkeye10,

It has to be nationalised Hawk. Can't you see that? It's such a pile of dominoes that loose canons are now a danger.

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@spendius,

socializing the losses that the private sector made may only serve to transfer the debt to the taxpayer. What are we at now, $1 trillion + and counting of losses transferred to the taxpayer??Does the system seem sound yet to you? How many more trillion are we going to take on, and who will pay it?? Will in prevent collapse or merely delay it?? My bet is delay.

For the free market system to work losses need to be allowed to happen, entitys need to be allowed to be dismantled. This that we are doing trying to keep the water out is a fools game.

It reminds me of something reported by Bob Woodward yesterday in WP:

Quote:

Mullen, formerly chief of naval operations, had not favored the surge; Keane had, publicly and vocally. Mullen told Keane he had become acutely aware of the strains on the Army and the Marine Corps. Military families were shouldering the strain, and the military was losing quality officers.

"Mike, all of that's true," Keane said. "But this is true every time we fight a war of any consequence." Wars break armies, and they have to be put back together, he said. That's the price of war. But the price was worth it.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/08/AR2008090802839_4.html?hpid=topnews&sid=ST2008090404206&s_pos=

Well, free markets break companies and corporations, and when the markets fail everyone suffers, but if let alone markets will be put back together again, and letting the process operate is worth it. If we don't let corporations and markets fail then we don't have a free market system. We have a bastard that will never be right.

The signs of our current stupidity were on the wall back when we would not let Chrysler fail, and then after we held that example up as a shining example of what should be done. Why the hell are the airlines still in business?.. every one but Southwest should not be. Some have been through bankruptcy three and four times....they should have been desolved the first time, or at least the second.

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Where is the US economy headed?

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