I am headed to Vegas and I have a really bad flu bug but I wanted to chime in here about the world markets.
The stock market is not a true indicator of what is going on, because the market will bob up and down. What creeps me out bigtime is that AIG needs more money to survive. AIG cannot be saved, even though we did a massive bailout of it - because it wrote insurance for derivatives that were leveraged 20:1, and all of these policies are worthless.
AIG participated in a thing called, "credit default swaps" something even more stupid than subprime lending, more stupid than mortgage backed securities. Bear Stearns collapsed because of the derivatives, and couldn't be saved, and AIG is needing this money for operations. However, it has no sustainability. If AIG goes, (and it will), then THAT will be another Bear Stearns moment. I said in the other blog on the day that Bear Stearns collapsed, it will affect our lives deeper and longer than 9/11. AIG collapsing will make a complete meltdown and devastation of the world economy. If you think this is bad, I am positive that these are good times compared to what is ahead.
Short term- GM, AIG fail. Then, Citigroup and B of A go. Ford and GM around the same time. The USD collapses, and hyperinflation kicks in, with the U.S. going insolvent. Job losses hit 25%, and this time the U.S. is insolvent so there can't be social programs to rescue or protect people. In the last depression, there were soup lines. In this one, who is going to provide assistance? I am so glad I don't have stocks right now.
The world economies are collapsing because of "emperor has no clothes" quality of fiat currency. My advice - enjoy these days right now and put your game face on because we're really going to have to be versatile, calm and strong.
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First off, AIG is not going to be allowed to fail because of exactly what you say that it could cause a complete meltdown. Not sure if you payed attention but your boy Obama set aside plenty of cash to bail more people out, there is the other half of the original bailout plus another 250 billion
Citigroup and BoA also are not going anywhere. Citi should and so should GM, which I'm afraid they are going to save as well as the auto suppliers.
Once again the dollar is shining through this, as gold is dropping. The dollar has outperformed gold throughout this whole crisis.
There is a big difference between not having stocks and no one to run the soup lines. 25% unemployment is retarded
And once again, who is going to buy your products, so why are you bothering coming out with new ones.
I also wonder why you are not blasting Obama and Geithner as you did Bush and Paulson, when they were crooks.
Telling people that there is not even going to be soup lines really goes along with your advice of being calm and strong.
Gary, I look up to you and I am begging for advice. I am a 40 year old school teacher and have worked as a photographer with my own studio for almost six years. I hate teaching with a passion, and love photography with an even greater passion. I have done very well for an area where 80% of our children are on free and reduced lunches. 2008 was my best year ever. Our Christmas sales were terrific. In the summer when I was able to be at the studio full-time, I made more than I make teaching. Trying to teach and run a business has been killing me. I was convinced I would be better off at the studio full time and ready to turn in my resignation. Then I got nervous, remembered your intuition about the economy, and looked at your blog. Now I'm scared *^#@less. Should I hang onto that guaranteed $400 a week paycheck from teaching, or would I be better off to concentrate on making all the money I can off my studio, and invest the money in "real" things like gold and a food and fuel stockpile?
Thanks, M.
donnamichellefowler.com
AIG will be sold off in parcels and the taxpayer will buy the shitty worthless parts. Pensions and 401k holders are screwed because they don't understand the fuckery. Real unemployment the way it was calculated during the depression is 18%(John Williams Shadowstats.com). U3 is the headline unemployment number which is 7.6% and projected to hit 8% on Friday when non-farm payroll is reported. U6 is the US government's broadest measure of unemployment which currently is above 14%. I think unemployment will go above 25%. I expect gold to go down farther in the short term and then rally well above the$1034 all time high.
that is some depressing news Gary. I hope to god you're wrong. I have to think that what you're saying couldn't happen here in the US. Otherwise I wouldn't be able to sleep at night.
"Short term- GM, AIG fail. Then, Citigroup and B of A go. Ford and GM around the same time. "
Wait. What? GM is so big they fail twice? Why waste your Canadian dollars going to PMA? Even Europe (which you said would be fine through all of this) is in the tank. Who will have money to buy your products? Or your book?
Hi Gary, I know I have asked this before, but maybe you can spread some insight on what you think may happen to the Canadian economy and the Canadian dollar being closely tied into the US. Thanks.
Donna, I think you can replace the $400/week salary with some industrious photographic merchandising. I mean that's $10/hr. With regards to the Canadian economy, in the long term, Canada should be fine because it is resource rich, and has the safest banking system in the whole world. This puts upward pressure on its' currency, but it will take quite a while. U.S. is the top importer of crude and softwood, and world resources will go up for international bidders. After a period of "creative destruction" transition, the players will shift but the location of the rich resources won't. 10 years out, Canada will be strong, but it will be rough for a while. Might even be rough for 20 years.
Before you quit your teaching job, keep in mind that you are also giving up I'm assuming full benefits, tenure, and retirement, so you are going to need to make up more than simply $400/ wk
Also weddings can be seasonal, which works well for keeping both jobs. I'm not saying you can't quit, but just be sure of what you are giving up especially since you state that you are in a low income area.
With tenure isn't it almost impossible for you to get fired?
Actually I'm only six years into teaching - I got into it after the business I was a distributor for yanked their millions out of the country and intentionally went bankrupt...leaving me bankrupt and without everything I'd worked for all my life (I really miss my 3000 SF house). Anyway, I have 10,000 in a teacher retirement account that will earn 8% interest if I leave it in there, and in 20 years I'll have $30,000...if we still have dollars. I don't have health insurance through the school - it would take exactly half my salary (currently there is a lawsuit about this in Arkansas - here teachers' ins. premiums are four times higher than other state employees). I found the same policy through PPA for about a third of the cost. So no benefits really other than a guarantee not to starve.
I would be leary about leaving any kind of steady employment right now. Unless you live in a bubble area such as "near big government" aka DC, I would hang in there and do both just for now. Our local economy hasn't really seen a serious downturn in the economy from my indications. Folks are booking weddings like crazy here in the Maryland DC metro area. I pray it stays that way because my only other choice is to learn brain surgery in order to make the loot I'm making shooting weddings. That or a professional hit man. I guess I could do that too.
I need to invent something like Gary did. I think about that every day. What a great way to make a living. Until then I will live vicariously through Gary's facebook page.
An NBC News/Wall Street Journal poll found 68 percent of Americans have a favorable opinion of Obama and 60 percent approve of the way he is handling his job.
Despite the struggling economy, 41 percent of Americans said they think the country is headed in the right direction, up from 26 percent in mid-January, before Obama took office, the poll found.
(http://news.yahoo.com/s/nm/us_obama_economy)
Interesting. Here the money seems to be (for me anyway) with baby and child photography. I average around $75 an hour doing that and love it. I HATE weddings. Too many bitchy people. Someone always shows their ass it seems.
I agree that inventing something and making a living off it would be the bomb. My variation of that daydream is having a book of my baby and animal photography published and licensing the images. Maybe some day if the world doesn't go to Hell in a handbasket.
All this worry has apparently led up to my first-ever bona fide heart-thumping, keeling-over panic attack this morning. Those really suck.
It seems just like the other day you were bragging about his job approval rating being 67%, now it is down to 60% and falling . . .
it will drop even more once people realize what "change" is going to cost them
The spending bill has 9,427 earmarks in it.
"it will drop even more once people realize what "change" is going to cost them"
If you say so.
Then again, you've been wrong before.
I would say a good measure will be who dominates the next election cycle.
If Obama does a terrible job, democrats will lose big.
On the other hand,
As for earmarks:
Earmarks $ in millions
Cochran (R-MS): 204 471
Wicker (R-MS): 143 390
Landrieu (D-LA): 177 332
Harkin (D-IA): 177 292
Vitter (R-LA): 142 249
Bond (R-MO): 86 248
Feinstein (D-CA): 153 235
Inouye (D-HI): 106 225
Shelby (R-AL): 125 219
Grassley (R-IA): 125 219
Murkowski (R-AK): 93 181
Murray (D-WA): 155 171
Lincoln (D-AK): 93 181
Pryor (D-AK): 92 167
Menendez (D-NJ): 171 160
Lautenberg (D-NJ): 173 159
Hutchinson (R-TX): 106 106
Levin (D-MI): 178 152
Stabenow (D-MI): 178 152
Byrd (D-WV): 76 152
oops, forgot to source it:
http://www.taxpayer.net/resources.php?category=&type=Project&proj_id=2049&action=Headlines%20By%20TCS
And you can see that it is truly biopartisan pork.
Of course the earmarks are from both sides, you keep trying to make this republican vs democrat.
Obama promised during the election to go through bills line by line to get rid of wasteful spending. This is his chance to make good on that promise and he is dropping the ball.
As far as the approval rating it was just funny how it dropped 7% and you were bragging about high it was. As I've said before I"m not against him, and I hope he succeeds, I don't think people really know what is going on and it scares me a little that his popularity is higher than his job approval rating. People seem to be in love with Obama regardless of his policy.
I bet he is going to see some serious pushback even from democrats on his budget and some major changes are going to be made before it is passed.
What I find holarious is Obama said during his speech before America it was earmark free...what a laugh, 2 days later the 9000 earmark figure comes out...a change? Just another lying politician. In the regular budget is 900 million to Hamas for rebuilding..bull, you know they will use that money to re-arm to hit Israel again...they did it before...why are we giving money to countries that hate us and to terrorist organizations...a change? I don't see it..same ole lies, same ole politics..
Frank, how the people feel about President Obama and the things he has done or is doing makes no difference at all. Today. How they feel in 6 months, a year is much more important.
The Democrats own the economy now, good or bad. I hope that it is good. Of course if it isn't.....
"How they feel in 6 months, a year is much more important."
Which is exactly why republicans are going to lose elections for the next few cycles. 8 years of abject failure has consequences.
Frank, you paint with too broad a brush. I could care less about Republicans or Democrats, I care about America.
The things that the Republicans AND the Democrats have done and are doing turns my stomach. Collectively, these are the people that placed us in this shit storm and I don't find any redeeming qualities in either group at this time. I further hold out little hope that anything will be better at the end of the day because the players have changed titles somewhat but the game is still the same.
You are the far, far left and that's fine, but it isn't just black or white. Democrat or Republican. There are those among us with views that don't line up with either party, and that's where I sit.
I hope that's OK with you.
You can continue to infer that I am a Republican if it helps you to make your point. Officially, I am "other" because aside from the two established parties "other" is the only third group that my state recognizes. I am "other".
Forget the politics, this is much greater than any Republican Democrat. This is a manipulated global recession/depression.
It is all part of a greater sinister plan (IMO)
Say hello to the Amero currency. The new North American banking system between Mexico, US, Canada. Dollar is gone
Similar to the Euro.
Everything and everyone including govs. controlled by Central Banks.
"There are those among us with views that don't line up with either party, and that's where I sit."
That's fine.
But that's like inventing your own currency and being upset when no one acknowledges its value.
It doesn't mean you can't keep trying though. Windmill-tilting is a time-honored tradition.
it is not Obama's fault, but it is over for the U.S. I'm sorry, but it's true.
Since Obama has been elected the market (DJ) has dropped 31%!
Yes, his policies of punishing the achievers and redistribution of wealth is to blame. From Capitalism to Socialism.
Wall Street is totally un-nerved by this Admin policies. It's a "No Confidence" vote! Period!
Even a liberal Democrat like Jim Cramer sees that!
"Since Obama has been elected the market (DJ) has dropped 31%!"
And if you think that is Obama's fault you're a fucking moron.
"Since Obama has been elected the market (DJ) has dropped 31%!"
And if you think that is Obama's fault you're a fucking moron.
How long are you going to blame it on Bush, at what point does Bam have to step it up.
When is this change coming?
perceived lack of direction from Government, simple as that.
@frank - Since I won't conform to one of the two big parties I am tilting at windmills? That's fine, I am on an island of misfit Americans just as you are. Those with your far left leaning beliefs are in the same minority position that I am in. Don't be afraid of it, it is a relief to be right in your own mind. Trust me.
And saying that Obama isn't the reason why the markets are down 31% since his inauguration is downright laughable. Watch the chart the next time the savior gives a speech about raising income taxes and capital gains taxes. You can hear the market deflate but you can also WATCH the chart fall as the words fall out of his face.
You are right that the last 8 years cost the Republicans both Congress and the White House. You are downright stupid to think that the American people are going to be willing to blame Bush and the Republicans for everything for the next 4 years like you, Obama, Pelosi, Reid and every talking head that the Dems march out to talk to the media seem hell bent on doing.
Lookey there. Obama opens mouth, words fall out, market goes from a weak positive to down over 50. I'm sure it is just a coincidence.
A N D he just blamed it all on someone else. Again.
Use that while you can Mr. President. The time will come when Americans will begin to either thank you for your actions or hold you accountable for them and harsh words from the far left won't change a thing.
China will not be fine. Two things, they don't have enough young people to support the old dried up workers in the future. This is because of their one child policy. There will also not be enough women for the men in the future because girl babies are given up for adoption. Unhappy young men is a bad thing for any society. This has been written about alot but I notice that you don't mention it.
"I am on an island of misfit Americans just as you are"
Um... I proudly voted for Obama and continue to support him, as do about 60% of americans today...
So um, epic FAIL on your categorization of me, again.
Of course, the ravings of someone that doesn't know the difference between a president and a savior are all pretty irrelevant.
Frank, you are nearly as far left as left can be. 60% +/- might approve of the job that the President is doing right now, but that doesn't mean that they agree with what YOU believe.
You may not want to admit that your words and beliefs put you in a very small minority, but they do. You may think that because 60% approve of the President's performance that you are a part of "the crowd". You aren't.
As far as the savior thing, you are the absolute last person that has any place judging me. You spit so much venom, call so many people (including past President's) names and are HIGHLY disrespectful of those with whom you disagree. You don't like it? I don't care.
A fascinating post about what and how I think by someone that doesn't even know me personally.
"You don't like it? I don't care."
Hey, we agree on something!
I say let them fail. Anytime a business or organization fails, it will eventually be replaced by another..let them fail and quit paying them for their stupid decisions. Quit rewarding them, let them fail.
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