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Listening to the somber faced bushman reading his teleprompter gave me a feeling of deja-vu all over again. Also, it seems like congress is about to cave in yet again and give these criminals almost exactly what they want. The people of Colorado and the rest of the USA are getting screwed yet again.
We are now watching the bizarre migration of a gigantic flock of multi-ton debt chickens coming home to roost. Notwithstanding the government's increasingly desperate writhings to risk THREE QUARTERS OF A TRILLION of taxpayer dollars to try stave off the inevitable, the liquidation of the massive debt--debt that was created by borrower ignorance and speculative greed, the irresponsible management and lending of money by the nation's financial institutions, the inept regulation (or lack thereof) that encouraged bad behavior, and (most of all) the misinvestment by government, corporations, and individuals in the fatally flawed and non-productive "experiment" called modern suburbia--is about to really get under way.
The result is going to be the worst economic catastrophe since the Great Depression--maybe even worse than that--and no American will be unscathed. The pinings of people on this forum about moving to Colorado--or anywhere else--will soon look silly and trivial. People had better be happy where they are--because chances are pretty good that is where they are going to have to stay. If they are moving, it may look like the "Grapes of Wrath" in the 1930's--people with a few belongings crammed into a rusting automobile, desperately trying to get someplace, anyplace, where there might be a job. Like most of the people in the Depression, they will likely find nothing better where they go compared to from where they left--maybe even worse.
Colorado is likely, as it did during the Great Depression, to fare somewhat poorly in this environment. Colorado's headlong rush to dismantle its manufacturing and agricultural base, pervasive suburbanization, over-reliance on construction and real estate speculation, hamstrung and inflexible governmental fiscal structure, and unbalanced transportation system will all work against Colorado being a very nice place to be. Like many during Colorado's earlier years (decades) of economic stagnation or decline, many of today's Coloradans will find that they, indeed, can not "eat the scenery."
I went back to January 2008 in this thread. Here is what I said then:
Quote:
Today's real estate bubble looks an awful lot like the stock bubble of the 1920's: millions of Americans invested in speculative assets (real estate) financed ("margined") with borrowed money. People will say that this is different because real estate has underlying value. Those stocks in 1929 also had underlying value, too, but it was something far less than the price the speculators had bid those stocks up to. I think the same is true of real estate now. Then, as now, the problem is that far too many people leveraged the speculative "paper" value of an asset with a quite "real" absolute liability--loans. While the paper value of the asset may evaporate, that liability just lays there and stinks--for somebody--the borrower, the bank, the investor. That is the "wretched excess" that a depression squeezes out of the economy. And I think the "squeeze" is beginning.
Or how about this that I posted in April, 2007:
Quote:
What's left [in the Colorado economy] is construction (building trophy houses that don't produce anything and may soon be unaffordable), recreation (hopelessly dependent on cheap AND plentiful gasoline that will likely soon be neither), high-tech (a large amount of jobs therein now being exported overseas), and the skeletal remains of a whole lot of industries that used to support the economy that have pretty much had the crap kicked out of them. That, and a bunch of service jobs and industry that depend on the robust health of the REST of the economy to exist.
Ripe for a fall? You bet. All it will take is the right "trigger." So many people post on this board who say, "It won't happen. It can't happen." That's understandable. Most of them hadn't been born yet or were sucking on a bottle the last time it happened. Sadly, when they get to "enjoy" this "crash," I think it will be much deeper and longer than the very painful '80's event. I just hope this country is able to "Cowboy up" and endure it. It's going to be a long, rough ride.
I really hope I'm wrong about my latest predictions, but I suspect that I'm not.
Bob from down south wrote: The S&Ls fell in the 1980s and we emerged stronger for it (albeit only temporarily).
Does anyone remember Neil Bush and the Denver based Silverado S&L scandal? The proposed bailout really is deja vu all over again, only on a larger scale.
Below is a recap taken from Wikipedia:
Silverado Savings and Loan collapsed in 1988, costing taxpayers $1.3 billion. Neil Bush, son of then Vice President of the United States George H. W. Bush, was Director of Silverado at the time. Neil Bush was accused of giving himself a loan from Silverado, but he denied all wrongdoing.[2]
The US Office of Thrift Supervision investigated Silverado's failure and determined that Neil Bush had engaged in numerous "breaches of his fiduciary duties involving multiple conflicts of interest." Although Bush was not indicted on criminal charges, a civil action was brought against him and the other Silverado directors by the Federal Deposit Insurance Corporation; it was eventually settled out of court, with Bush paying $50,000 as part of the settlement, the Washington Post reported.[11]
As a director of a failing thrift, Bush voted to approve $100 million in what were ultimately bad loans to two of his business partners. And in voting for the loans, he failed to inform fellow board members at Silverado Savings & Loan that the loan applicants were his business partners.[citation needed]
Neil Bush paid a $50,000 fine and was banned from banking activities for his role in taking down Silverado, which cost taxpayers $1.3 billion. A Resolution Trust Corporation Suit against Bush and other officers of Silverado was settled in 1991 for $26.5 million.
I'm going to save some of the silliness being posted here and repeat it back in 6 months when all has settled down. Great depression indeed - nonsense!
The US has made far too many promises and they cannot all be fulfilled. The boomers are not going to get all goodies they have been promised by our government. And all our taxes are going up. But I see no depression coming out of this mortgage business.
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in the largest bank failure in American history.
Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual to JPMorgan Chase. The remainder of WaMu, the nation’s largest savings and loan, will be operated by the government. Shareholders and some bondholders will be wiped out. WaMu deposits are guaranteed by the Federal Deposit Insurance Corporation up to the $100,000 limit for each account. WaMu customers are unlikely to be affected.
Yes one of the largest banks in the country went belly up and was sold at auction. And the whole deal went down in an orderly manner. Sorry, but no depression resulting from this deal. Keep hoping.
Yes one of the largest banks in the country went belly up and was sold at auction. And the whole deal went down in an orderly manner. Sorry, but no depression resulting from this deal. Keep hoping.
So, I guess Jim Jubak, a very respected and hardly alarmist columnist for MSN, was totally off-base when he penned this on Tuesday:
Quote:
This crisis is no longer about the U.S. housing market or mortgages, or even about failing Wall Street institutions. We're way beyond that. What's at stake now is the entire global financial system that has underpinned world economic growth over the past two decades or more.
I'm just amazed how the dominoes keep falling, one after the other--each bigger than the last--and people can still be in complete denial about what is happening. "The Titanic is too big to sink," comes to mind.
Low interest rates, a strengthening dollar, 6% unemployment, positive economic growth. Sure looks like the brink of a depression to me. But the news on the bail-out package will make for a bad day on Wall Street tomorrow. We'll survive.
And I put no credence in anything penned my MSN - probably the most biased "news" source out there. They will do anything to characterize the economy as being in crisis in order to swing the election. Shameful.
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