it strikes me as strange that 700 is the same as we spend EVERY YEAR ON IMPORTED ENERGY. WHY IS IT THAT WE AMERIACNS can not use billions of dollars for our own energy for investment in our own economy.

albill on October 10, 2008 at 9:28 AM

There’s nothing hidden about it. OPEC is waging open war against the US and the rest of the developed world. The response should be to seize the gulf oil fields (if anyone complains then we are just “internationalizing” the fields that they “nationalized” not too long ago) and let the arabs/persians/muslims pound sand. That’s what we should have done on 9/12, and will have to do eventually.

Obama will take a much bigger chunk of the wealth recovery than McCain will.

And this election will transform the Executive branch from a vacuum into a black hole no matter who wins. (Note to the usual trolls: “black hole” in the astrophysics sense of the term, no matter how desperately you wish it could be “coded” otherwise…)

Gilda on October 10, 2008 at 8:19 AM

That’s really a very appropriate metaphor, particularly as it applies to McCain. And ironic in the sense that McCain has been around for so long. He should be a known quantity. Instead, what he’ll do as President in so many areas is uncertain. I confess I don’t really understand the man.

The “guesstimate” I heard last night that is $2 trillion. the reality is that, because of their unregulated nature, it is anybody’s guess.

Thanks for that. One last question if you’ll indulge me. Doesn’t there have to be a knowable market price on the underlying asset to determine if any settlement is warranted? Do you know how that will work?

We’re in for another hell of a weekend.

Congress just can’t help themselves from legislating doom and gloom. Would that they would rescind the bail-out and enact a law prohibiting economic rescue plans.

We already know the only things that amalgamate success:
LOW TAXES
TRANSPARENCY WITH DEREGULATION
RULE OF LAW: NO TOLERANCE FOR CORRUPTION

That amalgamation is eschewed by Obama and embraced by McCain’s platform.

That McCain trusted Phil Gramm shows that McCain at least knows who is smart enough to grasp the overall economic picture with an eye for detailed components and relationships. Though I dislike Gramm, I abhor Paulson. There’s NO comparison between Bush’s choices and McCain’s. Bush ALWAYS opted for leaving socialist agenda driven Democrats in appointments that should never have been left to wreak such havoc as torments us now.

As likely as not, McCain will draft Romney to be Treasury Secretary. Romney’s already said he doesn’t want any staff position. And McCain’s already mentioned a Democrat off the cuff for the job. As political gestures, alliances and compromises go, I think McCain would ask Romney to the job, and Romney should take it and PROVE his effectivity in FEDERAL (global leader) government economics, not remaining limited in bragging rights to the private sector. That McCain is chesting his cards and tossing loose tangents for the press to get lost with is NOT surprising, but his own way of winning the poker game. Remember how he fooled us all with his dismissive response to the press asking “what about Palin as your running mate”!

We have a political leadership vacuum, and nobody currently in the forefront was able to assume it… If the carnage goes on much longer, we’ll have to make Larry Kudlow the President, and his tv panel the cabinet.

JiangxiDad on October 10, 2008 at 7:03 AM

Well said. It seems certain we will do a lot worse than Larry Kudlow.

I’m really trying to remain rational and positive, and take the longer, historically-informed view, but my disgust with our political class has reached an all-time high. I have lost all confidence in the clown show that is Congress.

And this election will transform the Executive branch from a vacuum into a black hole no matter who wins. (Note to the usual trolls: “black hole” in the astrophysics sense of the term, no matter how desperately you wish it could be “coded” otherwise…)

You ain’t seen nothing yet.

Without the rule of law, all in ruined.

Rule of law is NOT to be ignored, and I was really amazed that McCain argued for it so successfully during the debate.

Frightening stuff. Of the total 62 trillion CDS market, do you know what the value is that Lehman is responsible for?

JiangxiDad on October 10, 2008 at 8:01 AM

The “guesstimate” I heard last night that is $2 trillion. the reality is that, because of their unregulated nature, it is anybody’s guess. I don’t think it would take nearly that much to cause even more havoc. In any case, between today and tomorrow, we should know a number. These things are like explosive booby traps in Viet Nam… maybe it’s a 5.56 cartridge that goes off when you step on it and shoots through your foot… then again, maybe it’s an unexploded 500 lb bomb. As an aside, anybody heard anything about the Russian warships heading down to visit Chavez?

CC

Actually, this might be really interesting. I may try to do it but I do have a real job for now.

own the banks, own the Oil companys, and secure the voter for a thousand years, you’ve heard that before, from some short guy that gave the world the Volkswagon, ’Peoples Car’!!

canopfor on October 10, 2008 at 7:04 AM

Touché!

The current market size of credit default swaps is over $62 trillion… many times the size of the entire stock market.

For those that supported the last bailout and are probably going to support the next one they are already talking about, come to your senses. For those in the market that choose to stay there or aren’t in but are looking at getting (back) in… well, as Ron White said, “You can’t fix stupid.”.

CC

CapedConservative on October 10, 2008 at 7:27 AM

Frightening stuff. Of the total 62 trillion CDS market, do you know what the value is that Lehman is responsible for?

In the last Presidential debate,in the question of energy, Obama said, that if thousands of acres,the Big Oil companys don’t use it, they will lose it!

canopfer @ 7:04

The “Big Oil Companies” would love to be released from the leases that bind them to acres without oil to drill! Obama’s not going to release the lease obligations. He’s just taunting the industry having the legislated Democrat Majority big mouth with the big stick.

GM has the leading edge technology in their trucks today; and some businesses actually require trucks.

Honda cars have longevity, yes. But Honda trucks have nothing on the GM trucks.

When the market fell in 1929, it took 27 years to get back to the point at the peak before the decline. 27 years. The drop was from 380 to 43. From the 14,700 or so high, that would equate to the market dropping today to 1663. Most of us would consider that 1663 a ridiculous number… not possible.

The credit problem stems from financial institutions not knowing who is holding the unregulated credit default swaps… afraid to lend because the borrower could be holding these very dangerous instruments without having to report it. Suppose, just suppose, that we find a nice AAA rated company that is not in the financial sector but is holding some of these products… someone that is doing well… someone that has tons of cash…. someone that has a great looking balance sheet. The CDSs are unregulated and could be “gambled on” by anyone with sufficient cash to pay the “premiums” or with the credit rating to attract a buyer. When one or more company that is not in the financial sector takes a dive because of this, you will then find people afraid to buy the stock of any AAA rated company because, as with the banks, no one will know who has the disease and who doesn’t.

At 2:00 today, a lot of people on the other side of credit default swaps held by Lehman will have to open their kimono… AIG is just one of those suspected to be holding. It was around 12:30 last night that I heard the guess that those held by Lehman that trigger today will result in two trillion worth coming due. At that point, they will be forced to appear on some balance sheets. Someone is holding these. If they are in the financial sector, we are going to have more “banks” folding their tent and the market may or may not have already taken this into consideration… no one knows.

On the other hand, if some of those companies that become exposed today are not in the financial sector… if they are companies believed to be solid, the ridiculous becomes not only possible, but probable. The current market size of credit default swaps is over $62 trillion… many times the size of the entire stock market.

For those that supported the last bailout and are probably going to support the next one they are already talking about, come to your senses. For those in the market that choose to stay there or aren’t in but are looking at getting (back) in… well, as Ron White said, “You can’t fix stupid.”.

CC

A quarter of a century ago (2008),in the era of the labour
manifesto(Liberal Democratic Party)that was dubbed by a mem
ber of the Labour Shadow cabinet” the longest suicide note
in history”,when one wanted to depict the absurdity of the
view of the world advanced by Tony Benn(Chris Dodd)and Mich
ael Foot(Barney Frank)one simply had to say:

“They want to nationalise the banks”!

People fell about laughing.(Like Obama Barack,Maxine Waters)

Today,it is all considerable less funny.

We are all Socialists Now.(Liberal Democratic Party!)
————————————————————

In the last Presidential debate,in the question of energy,
Obama said,that if thousands of acres,the Big Oil companys
don’t use it,they’ll will lose it!

Maxine Waters,in dragging Big Oil up for investigation on
the price of gasoline(oil),told the Oil companys,either do
something,or will take over those companys and will run them
are selfs!(The Liberal Democratic Party!)

Sounds like all along,this was planned,as if the DNC was
engineering and designing this,they couldn’t get traction
on Iraq,then came the ‘Race Card’,and now the sure fire
tactic of all,’The Economy’!

And Liberals do,what they do best,SCARING THE LIVING HELL
OUT OF THE uninformed American voter!!!!

Case in point,Old Age Pension,the Liberals scared the bejeezes out of the elderly,and that they would be eating
canned dog food!!

And out of that Newt was savaged!!!!

Call me crazy,but the Liberals know,own the banks,own the
Oil companys,and they will secure the American voter for a
thousand years,ya,I know,you’ve heard that before, from some
short guy that gave the world the volkwagon,’Peoples Car’!!

I’m not going near any trades until at least next week. Maybe longer, much longer if I have to.

No way will I be able to pick the real bottom so I’m going to wait until it looks like a semi-solid turnaround is already occurring. Happy to give up a few points of potential upside in exchange for a a bit more peace of mind, in this environment.

Still I can’t help but think that once-in-a-lifetime opportunity is about to knock.

Gilda on October 10, 2008 at 5:55 AM

My sentiments too. If I had to guess, I’d say we hit bottom sometime early next week. By then some of the credit market remedies should begin to slowly start, and the resultant pressure on the stock market ought to begin to ease.

The country is “on sale.” I think it will be a great time to buy if there is some sense that the villains of this piece meet their proper end, and if their replacements are trustworthy.

That’s a big if. Unfortunately, one thing that has been exposed here is that the politicians like Bush, McCain, Obama, Pelosi, etc. don’t have the expertise to lead the economy, and only react, and weakly at that, after the fact. We have a political leadership vacuum, and nobody currently in the forefront was able to assume it. This is a terrible situation to be in 3 weeks out from a pres. election. It means both sides picked the wrong guy. The economy was able for a few weeks to trump all other stories. If the carnage goes on much longer, we’ll have to make Larry Kudlow the President, and his tv panel the cabinet.

Whoever assumes the mantle of the presidency is inheriting a can of worms. I prefer what these economists have to say about McCain’s pro-growth approach rather than the Obama income-redistributionist, investment-avarse, and protectionist mode. Obama will tax us into a pit of poverty; the outcome will be “fair,” for we will all be poor, and there will be no incentive to achieve.

POST THIS EVERYWHERE!