Where is the US economy headed?

Sir--You may call an explanation a contradiction, if you wish. But you are incorrect!

If diversions are explanations, then the moon is made of green cheese.

BTW, I've been at A2K since its inception and you can't be banned by a member or a group of members. You have to violate the TOA so severely that an administrator bans you from posting.

genove wrote in his previous post:

Lightwizard asked: Then in a subsequent genove post, he wrote:

Sounds like another Foxie.

The spin game! Yes, Foxie loves to chase a tail -- foxes do have tails.

Now for something objective:

Inside the banks

Jan 22nd 2009
From The Economist print edition
Blank cheques, bankruptcy, nationalisation: the options are dire, but governments must choose between them

Illustration by Derek Bacon

“STARTING today,” President Barack Obama declared in his inaugural address from the Capitol, “we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.” In fact his first, urgent task is to remake finance. As Mr Obama spoke in Washington, DC, the markets in New York were sinking under the weight of failing banks despite the promise of a plan from his economic team. A day earlier Britain had put forward its second attempt to get its banks to lend. Others, such as Germany and Italy, may before long need to step in; France, Ireland and Denmark already have.

The crisis has shown up flaws in financial markets and the global economy. Huge flows of capital into debtor nations like America and Britain pumped up asset markets (see article). These fed the instabilities of financial markets"which, as our special report explains in this issue, were themselves plagued by poor regulation, dangerous incentives and the reckless use of mathematical models. Fixing this will take a lot of work over the next 18 months or so, when legislation should be ready, but already a picture of a new finance is becoming clearer: smaller, better regulated, more conservative.

That vision is worth keeping an eye on, but the immediate priority is the imperilled banking system. Just now, with finance in ruins, the nexus of markets and non-banks that make up the “shadow banking system” has failed. Decent businesses are being starved of credit and driven into bankruptcy. For their sake, and for the people who work for them, it is time to admit that the first round of bank rescues was not enough. With talk of huge public subsidies"nationalisation even"the question is what to do next?

Article continues here:

http://www.economist.com/opinion/displayStory.cfm?story_id=12987495&source=hptextfeature

the wizard quoted :



as i've posted earlier , that's about the position germany (and japan) were in when WW II ended - except much , much worse .
sure , the period from 1945 t0 1948 was pretty rough - people were hungry and cold - work to be done on an empty stomach wearing old and thin clothes - but people stuck it out .
what choice did they have ?
after the currency reform in 1948 things started to improve at a good pace .

essentially , germany had to rise from the ashes - america has factories , highways , railways , abundent farmland - germany had little of that when the war ended .
of course , endless bickering won't build a single house or feed anyone hungry .

"...begin again the work of remaking ..."
that's the only way it'll work i believe .
hbg

I don't remember quoting the Inaugural Address, but Germany and Japan had a great deal of help from the US rebuilding. We don't have anyone to turn to except Americans , those that have initiative, ingenuity, invention and intelligence to get honest and out of the denial that standing still will heal the financial wounds. The wounds are self-inflicted -- very nearly an attempted financial suicide. Stopping the bleeding, sewing up the wounds and using the right medicine will get us back on track.

hbg, I'm gonna agree with Lightwizard here; both Germany and Japan had help from the US to rebuild their country. I'm not taking away anything from those two countries who were able to build themselves into the second and third biggest economy in the world, because many countries given assistance from the US did not succeed as well. It does take a certain kind of foundation of the country to succeed, and both Japan and Germany had it in spades.

Well, no matter what anybody thinks -- we were making reparations for some overzealous acts like the fire bombing of Dresden and the A Bomb. Not that the enemy didn't deserve a good trouncing -- Hitler had a despotic criminal mind and Hirohito had a deluded and pinched religious Shogun complex with generals who could apparently hypnotize him. The debate on that could go on, but it's actually to America's basic core of doing the right thing that motivated it to help rebuild what they destroyed.

Borrowing from the banks in China, thinking of Shogun brings to mind James Clavell's Noble House -- it's the most help another country has done so far to get the show on the road. I'm going to start practicing Chinese in case we can't pay the loans back.

wizard wrote :



there is no question that germany received great help from america - and i've written about that several times .
without american help , germany might never have been able to recover .

i just wanted to say that the german people had to work for practically nothing until 1948 when the "wirtschaftswunder" (mainly a currency reform) took place .
america has a fully functioning infrastructure , educated people , plenty of food ... ... there is really nothing that should stop america from a recovery .
some "reforms" are no doubt required but it should be "relatively" easy (but not painless) to bring america to the forefront again - and perhaps more so than ever before .
hbg

I believe Obama provides us with hope in great anticipation for our future.

The only trouble I can see is that Mr Obama seems, on the face of it, to be anathema to your cause ci. Not only was he at worship in St John's on the morning of the inauguration but he was swearing on the Bible and God blessing you all and he was in Washington Cathedral the next day and dragging his team in there with him.

And that lot standing around for an hour in temperatures of -5 centigrade, the scientific scale, suggests to me a species of nut-casery. The hysterical throng having the $$$$$s extracted was out the other side of that.

spendi, My own siblings pray for me - probably every day. Why should I have negative feelings about those who worship their god(s)? Don't bother me none. ***** Harmless practice.

I wasn't referring to your relations praying for you ci.

I was referring to you bringing up the brief span.

Mr. Lightwizard- I will try to help you understand--The following is a quote from the Chicago Tribune--Syndicated Columnist and Editor- Steve C hapman-

CAPS MINE

Quote-

"Congress is complaining that banks that received federal aid are being overly stingy. Well, yes. If a lot of your loans go bad, it's a sign that you need to exercise more care. That's especially true dring a recession, which can wipe out companies that once were profitable. ANY BANKERS WHO WANT TO KEEP LENDING AT THE RATE THEY DID BEFORE ARE ASKING TO BECOME INSOLVENT, AND MORE INSOLVENT BANKS WOULD DRAG DOWN THE ECONOMY."

If you can't understand that, I have more!!!

This from the guy with more opinions than Carter has little liver pills! LOL.

Speak for yourself. Does the blind leading the blind inspire you?

Timothy Geithner, the only guy in the entire country according to Democrats that knows how to run the Treasury and the IRS, does not know how to pay his own taxes. I guess it was Turbo Tax's fault, now I think I read? LOL. Is this guy a knucklehead or what?

Okie- It's fine that Cicerone has opinions. He should post as many of them as he wishes. It seems to me that his basic problem is that he almost never provides evidence or documentation for his posts. He may be a supremely well qualified autodidact but I don't see any evidence of that.

Okie- O ye of little faith!!! President Obama does not need a competent Treasury Secretary. Don't you realize that President Obama is probaby the most intelligent and learned world leader? He already has a financial plan set up in his head. Geithner is just a front man. And if the plan does not work, President Obama can just blame Bush!
There is an interesting article in the latest "Rolling Stone" where Krugman( the Economics guru of the NY Times where Krugman advises that President Obama must bite the bullet and carry on with a financial plan which may. at first, cause a great deal of hardship for the American people. Krugman advises President Obama that, as President, he may even have to oversee an Unemployment Rate of 9%. When I read that, I knew that we weren't going to get anywhere near the GREAT DEPRESSION'S Unemployment figures(23%). I realized that we were not even going to get near Jimmy Carter's 10% Unemployment.

But we were going to send over TWO TRILLION for a financial plan?????

And the stimulus plan is to give tax cuts to people that pay no taxes, and that don't provide jobs, so they can buy more plastic junk at Walmart, junk that is manufactured in China, so that when all the money is spent, the plastic junk eventually ends up in the landfill, and no new lasting jobs created, except maybe a few more trash haul company employees. Now, that is genius thinking.