Does Anyone feel like Bailing

[tw]

We can now ignore the wacko extremist's attack on others, and return to topic and problem. The numbers. Citigroup has maybe $2trillion in obligations. AIG only had $1trillion. Whereas we once thought the investment banks would harm the economy, well, future (and not yet seen) damage will be even greater. Citigroup now needs a second government lifeline.

This is a complete shock even to me. Citigroups was once considered a more responsible financial firm which suggests how deep George Jr's deregulation has created economic cancer.

The entire world wealth measured something over $70trillion. According to Bloomberg, the US Treasury has provided corporate welfare amounting to $7trillion. This from a government that had chalked up record deficits because Cheney said, "Reagan proved that deficits don't matter" (he still will not admit to any mistakes).

Well, someone must still provide money for that new $7trillion debt. We have yet to start selling off America and taking second jobs to pay for that new debt.

Put $7trillion into perspective. The S&L crisis that so harmed American during the days of the Keating Seven - that shocking bailout was only $0.22 billion with symptoms such as the 1987 stock market crash. Deregulation created that economic mess and harmed the American economy. Today's numbers say that is next to nothing - trivial. $7 trillion on top of a $1 trillion "Mission Accomplished" on top of massive debt obligations also imposed by George Jr and massive debts made worse by tax cuts to the rich and 50% of American companies not even paying any incoming taxes.

By the numbers, what a mess. And we still don't know how many more companies have Enron style balance sheets - will be in line for government bailouts.

We have no reason to believe the bottom is yet in sight. One study using 1929 as an analytical basis says a bottom will occur when stocks have dropped by 80% of their 2007 value. That's additional $7trillion of Treasury debt we must get by selling America and no longer having those profits from the newly foreign own capital earning real estate, intellectual assets, and equipment.

At this point we have no grasp how severe our economic damage is due to George Jr and legalized money games.

[classicman]

Originally Posted by tw

Put $7trillion into perspective.

more than the output of the entire US last year.

Originally Posted by tw

One study using 1929 as an analytical basis says a bottom will occur when stocks have dropped by 80% of their 2007 value.

Don't get carried away there tw - What were the default rates and jobless percentages in '29? You know that this is not a realistic comparison...

[tw]

Originally Posted by classicman

Don't get carried away there tw - What were the default rates and jobless percentages in '29? You know that this is not a realistic comparison...

This is one analyst projection by associating percentages and chart characteristics to those in 1929. Neither I nor the analysts says it is correct. He is simply noting similar trends AND therefore a possible scenario. Meanwhile, when everyone was saying they had never seen anything this bad (in late October), well it has already gotten much worse then anybody thought even back then. Those who have predicted the worst are now accused of being too optimistic. Reasons why are discussed in another thread called "How the GAME is played."

If I read another prediction correctly, Obama is talking about the need for another $700billion TARP. And this is no longer for buying up bad assets. That Paulson strategy has even been abandon by Paulson.

Bottom line remains. We have invented massive assets that really never existed. Then enriched those who invented these fictions. Now those assets have vaporized leaving massive debt obligations. Who will provide that money? Well, the best American allies (ie Saudis) have put up some. But few will loan us money due to mythical America accounting standards. So, the government must issue corporate welfare in various forms, then the government can get foreigners to provide that cash.

Few other American financial institutions can be trusted anymore. You will see foreigners putting up circuit breakers to protect the world from American MBA games. Paulson is creating massive government debts, then gives that money to American companies with the biggest hands out.

Time to be fair was back when wacko extremists were saying, "Reagan proved that deficits don't matter." It was obvious back then only to a few how often George Jr was lying. Time to pay for not paying attention. Except it is worse than even the worst projections - and then last week got even worse again.

Worst part - there is no certainty. Even the most negative predictions have become too optimistic.