Quotes of the day
posted at 9:30 pm on November 23, 2008 by Allahpundit
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“Under the proposal, the government would shoulder losses at Citigroup if those losses exceeded certain levels, according to these people, who spoke on the condition that they not be identified because the plan was still under discussion.
If the government should have to take on the bigger losses, it would receive a stake in Citigroup. The banking giant has been brought to its knees by gaping losses on mortgage-related investments.”
*
“All financials will be owned by the U.S. government in a year. I bet you.”
*
“At the risk of hyperbole, we should not be worrying about whether this is going to be a thin Christmas for retailers (it is), but whether Britain and the West are about to plunge into a years-long economic Dark Age – complete with mass unemployment and social unrest…
The fattened-up capital cushions of the banks will be enough for a while, but banks remain colossolly levered. It wouldn’t take much of a deterioration in their assets to wipe out all the fresh capital raised. The banks may well have to come back to taxpayers for more. They will be given it, too, albeit at the price of total nationalisation.”
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See? This is why bunnies don’t ask cheetahs for directions to the watering hole.
Black Adam on November 24, 2008 at 12:36 AM
I’m thinking we may have a short term period of deflation followed by massive inflation.
FloatingRock on November 24, 2008 at 12:41 AM
why reinvent the wheel? We know that Barry only talks about reinventing the wheel. The Jews are screwed re-re-redux, time to smear the doorpost with blood…a-gain. Anyone wonder after all these tragedies befall the Jews why they celebrate passover? Maybe they are more faithful than Christians give them credit for.
anti-boomer on November 24, 2008 at 12:42 AM
……freedom, exit stage left.
Farewell.
John The Baptist on November 24, 2008 at 12:45 AM
amen, and I live in Idaho, I’ll never go hungry. no gun laws here either. was it Glen that said real estate in Idaho would go sky high? Double ya!
anti-boomer on November 24, 2008 at 12:45 AM
anti-boomer on November 24, 2008 at 12:47 AM
1. They wanted Hope and Change. Never thought about being careful about what you wish for.
2. Nobody ever went broke underestimating the intelligence of the American public. – H. L. Mencken
In other words, we should have bet against the American People… and we would have been laughing in their faces, all the way to the bank!
newton on November 24, 2008 at 12:47 AM
Look at it this way.
1. Paper over crisis, bail out evrything in sight. PRinting money is going to cause inflation the second foreign countries stop buying our t-bills. Hyperinflation. What will they do to solve it? Impose trade restrictions? Our dollar is worth nothing so foreign goods will very expensive.
2. Raise interest rates. This will happen as soon as foreigners stop buying our debt.
3. Extend unemployment benefits and continue to spend money on entitlements further deepening our stagflation.
Now we are in 1979-80 mode. The difference is we are now more dependent on foreign energy. Gas will become more expensive almost over night.
The only way out is to produce our own energy and bust up unions to make our wages competitive. These options are antithetical to the Democrat party. We are entering the beginning of a U shaped reccession. If Democrats continue to control Congress we could end up in an L shaped reccession. The UAW is toast but that will not keep the Democrats form propping them up for political gain.
I doubt we end up like Russia. They had no idea what capitalism was. They had to deal with the mob and a slothful economically incoherent/ignorant populace we have hard working people that believe in free enterpirse so I doubt we end up like the former Soviet Union.
Oh and to anyone reading this youtube Peter Schiff and John Rogers.
Theworldisnotenough on November 24, 2008 at 12:49 AM
I am pulling out on Monday, so a brief rally is good for me, which is what I expect to see from the market given the ‘good news’ about Citigroup. Still not entirely sure what I should put it into. I think I will keep my gold stocks, but abandon everything else.
Commodities will be left with little in the way of demand for them so they will face deflationary pressure, but the US government will have no choice but to print money and inflate their way out of debt, or default. Governments rarely choose the default option unless pressured by someone else to reform. For the US government there is no one else big enough, so yeah they will print funny money.
sharrukin on November 24, 2008 at 12:50 AM
So what is the catch phrase of the day?
Gird your loins.
Or
Grind your groins.
Dead broke redneck porch sitter wants to know.
Limerick on November 24, 2008 at 12:52 AM
Communism is here.
Johan Klaus on November 24, 2008 at 12:54 AM
i think it was Rousseau who last said that Russia will always be barbaric because Peter tried to foist democratic reforms on them too early. I agree: Russia=barbaric now and forever. Look at Medvedev’s foreign policy approach in Latin America. 1) the chinese beat Medvedev by a week
2) the US is pissed, even if anti-monroe is in charge.
and:Iraq has a far more respectable democracy at this point, they have purple (non-partisan) fingers. And, by virtue of the argument of general fitness, I’m sure Americans would be much better communists than Russians. We’ll see. All we have to do is appoint Mennonites like me to power, I’ll show you how it’s done.
anti-boomer on November 24, 2008 at 12:59 AM
Run around in a circle screaming hysterically until you hit a wall and knock yourself unconscious?
sharrukin on November 24, 2008 at 1:00 AM
anti-boomer on November 24, 2008 at 1:00 AM
Jim Rogers.
FloatingRock on November 24, 2008 at 1:06 AM
My wife has been telling me that for years.
Limerick on November 24, 2008 at 1:08 AM
ALL major financial firms will be owned by the government??? I think not — I can think of one privately owned (massive and smart) financial company based here in my hometown that won’t go the way of the others…
D2Boston on November 24, 2008 at 1:09 AM
This socialist un-natural bail out crap.
If freedom and the natural capitalist order would have been allowed to run its course there would have been pain but the second tier (the ones who made good loans and didn’t feast on the slop of high risk high return loans) would have bought off the 1st tier’s assets and stability would have followed.
This idiocy with the government buying the nobles off so they don’t fall will just end in a bigger disaster.
In the meantime I expect the next govmunt move will be to check those gross Exec salary/bonus systems (which was a small part of the problem that would have been fixed in the natural order) but so will be the beginning of the government mandated salary controls.
“AND SO IT BEGINS”
C-Low on November 24, 2008 at 1:09 AM
The Theresa Heinz All-for-me bank?
Limerick on November 24, 2008 at 1:10 AM
Jim Rogers thinks commodities will be among the first to recover but they are being hit now, apparently, by forced selling.
Thanks, Theworldisnotenough, for mentioning him the other day. There is an interesting multi part interview of him on YouTube.
FloatingRock on November 24, 2008 at 1:13 AM
Why would they recover if industrial processes which utilize them are idled?
sharrukin on November 24, 2008 at 1:16 AM
socialism fun stuff
allrsn on November 24, 2008 at 1:23 AM
I don’t have my own opinion on the matter so instead of trying to paraphrase I’d recommend watching this interview.
It’s not in part one, necessarily, but the entire interview is less than 20 minutes long.
FloatingRock on November 24, 2008 at 1:24 AM
funny, Bernake thinks inflationary policies (printing money) keeps deflation of commodities in check (apparently it doesn’t),
But,
It’s fair to say that if the US economy is screwed the world is screwed. Decoupling was and is a pipedream of a multipolar world.
Take that to the bank.
even Greenspan admits he doesn’t understand what is going on in the global economy. if we get out of this, it will be out of luck and inertia, nothing more.
anti-boomer on November 24, 2008 at 1:27 AM
No sweat.
People should check the housing market. The deals are to be had. I have no skill at market timing. I have no idea when the bottom is going to hit but I am seeing condos selling for lower than $130/sq ft, some much lower. That is unheard of. A condo in San Diego for $100,000 dollars? The Fed will try to jumpstart the housing market with low rates, so if it is a good fit buy it. Interest rates will spike, so save like crazy (in other currencies of course) then use that cash to buy after the interest rates come down.
Theworldisnotenough on November 24, 2008 at 1:27 AM
His opinion on commodities start about half way through part 2.
FloatingRock on November 24, 2008 at 1:28 AM
I have it bookmarked. My sound died on me about four hours ago so will have to get to it late Monday.
sharrukin on November 24, 2008 at 1:31 AM
Of course not. But they will be the first to recover. Asia has been saving and their central banks are lending at a higher interest rates. They do not need us to recover. Once they do Australia and New Zealand start cranking out energy and minerals. The lower commodities go the better buy they are. I wish I had the money to invest. I am considering emptying my 403B Jan 1st and taking Jim Rogers and Peter Schiff’s advice. I won’t have to pay the 20% until April 2010, or later. By that time I could have made it back via the debasing of the currency.
Theworldisnotenough on November 24, 2008 at 1:35 AM
Let’s see now, the govmint owns AIG, will soon own Citicorp and the “Big 3″ and the Fed owns the government. The Fed is creating money so fast they can’t keep up.
What a wonderful country we had.
When does the revolution start? Before or after they deploy the troops to the streets? I’m hoping before, we’ll have a better chance if so.
rockhead on November 24, 2008 at 1:35 AM
Where is the 2010 recovery date coming from? If it’s coming from the same geniuses that brought us to the place we are now, colour me sceptical.
p.s. My financial advisor is scared which isn’t a good sign if you ask me. They keep saying we have reached the bottom and we keep ploughing through.
sharrukin on November 24, 2008 at 1:41 AM
He says that during the depression commodities were the first to go down but then supply was limited by the difficult credit climate and lack of availability of necessary materials, (like fertilizer for some farmers), and the reduced supply caused commodity prices to rise.
So basically the fundamentals of commodities are sound, but tertiary problems with the economy limited supply.
FloatingRock on November 24, 2008 at 1:44 AM
So the government subsidized bad loans, which caused a financial meltdown when the loans defaulted, and our solution is to give the government more influence over lending? I might feel better about this if the government had some kind of an exit strategy from our financial markets once things are stabilized.
RightOFLeft on November 24, 2008 at 1:45 AM
By sound, I assume he means they don’t suffer from mismanagement like the financials and the Big3, etc. It’s the supply constraints that would actually cause commodity prices to rise early, according to him.
FloatingRock on November 24, 2008 at 1:49 AM
You discount that those troops are our sons and daughters. Some will deploy. Some won’t. That’s not bluster, that’s a fact.
Limerick on November 24, 2008 at 1:50 AM
53% of those polled said they are leaving the military rather than stay. Military cuts and diversity program could cut that a lot faster than we might imagine. ‘Loyal’ troops wouldn’t be that difficult to find.
sharrukin on November 24, 2008 at 1:55 AM
Sad, but true. I was one of those who left a damn good career rather then serve under Carter any longer. Always sorry I left, never sorry for why.
Limerick on November 24, 2008 at 1:57 AM
I hope there are respectable rich people down south who’ve given some though to organization, logistics and communications in a worst case scenario. Given sufficient cause, manpower and knowhow won’t be the problem, I don’t think.
FloatingRock on November 24, 2008 at 2:04 AM
Obama calls on his Internet campaign army to march again
http://www.mcclatchydc.com/homepage/story/56233.html
WASHINGTON — President-elect Barack Obama’s 3 million campaign volunteers got re-enlistment notices this week.
The volunteers’ options are, Plouffe wrote:
* Campaign for progressive state and local candidates
* Undertake grassroots local efforts to advance Obama’s agenda
* Train others in Obama’s organizing techniques
* Focus on local political issues.
“Obama’s building a political machine,” said Stephen Hess, a presidential scholar at the Brookings Institution, a center-left Washington research group.
I suspect the RINO herds at GOP HQ are going to find themselves somewhat overwhelmed. Change.gov is going to merge the permanent campaign with the power of the state and it will be a brass-assed miracle if the Republicans ever see office again.
sharrukin on November 24, 2008 at 2:32 AM
NOW, can we say Democrats crashed the finance markets on purpose?
Speakup on November 24, 2008 at 2:42 AM
Meh…………….
Democrats in control.
…………… looks like this is going to be fun.
Seven Percent Solution on November 24, 2008 at 2:46 AM
Nah … think more along the lines of Albania, except that, instead of a speck of a country with a currency that mattered to no one, this will happen in a country that drives the world with the currency that is the trade and reserve currency of the world. No big deal. At least liberals got take control of power, which is all they ever wanted … well, that, and to force people to do whatever their whims dictate. But we can’t hold that sort of despicable depravity against them. They were seconds in the factory of life.
progressoverpeace on November 24, 2008 at 2:48 AM
Where are all the trolls………………?
……………….. must be nice to have mom’s basement to fall back on.
Seven Percent Solution on November 24, 2008 at 3:05 AM
Meh…………
Democrats in control.
…………. this is not going to be fun.
Seven Percent Solution on November 24, 2008 at 3:06 AM
I think there is more than a little hysteria in all this. That works for the Democrats. Tell everyone it is the end of the world and when the world goes on, they will think they dodged a bullet.
Terrye on November 24, 2008 at 6:10 AM
I read a lot about the populist movement of the late 19th and early 20th centuries, and nothing we are seeing here comes close to the kind of economic havoc that used to take place in capitalist economies on a regular basis. Back then they called them panics, not recessions. Maybe that is what they really are, panics.
Terrye on November 24, 2008 at 6:13 AM
BTW, I heard that community or local banks are doing okay and last I heard Wells Fargo was fine too. I hope that remains so.
Terrye on November 24, 2008 at 6:14 AM
It’s worse.
Ordinary banks has got 10% capital reserve that’s 10 times leverage, the investment banks got 40 times leverage 2.5% capital reserve . And that’s where the problem started..
the_nile on November 24, 2008 at 6:24 AM
You’re missing the difference, Terrye. Those panics were on banks. Banks went out of business and people lost money, but that was it. This problem is much deeper. It is a monetary problem. This is not just a matter of companies taking losses and going out of business, taking their stockholders and creditors with them. We’ve hooked the Treasury up to the banks, insuring far more than our government could ever make good on, and the government/Fed is handing out TRILLIONS of dollars. Panics of old were localized to the US economy and had little effect on the currency, itself. This problem goes right to the government, and the total value of our currency is based on “the full faith and credit” of the US government.
What we have is a crisis of confidence in the most fundamental institutions and functions of government (the seriousness of which cannot be underestimated) because our federal government does everything except for what it’s supposed to do, and it doesn’t even do that well.
progressoverpeace on November 24, 2008 at 6:25 AM
We’re just spreading your wealth..
the_nile on November 24, 2008 at 6:25 AM
progressoverpeace:
No, they did not just lose money, they lost everything. In the late 19th century forclosure rates on farms in states like Kansas were more than 50%. Between the grasshoppers and the banks they went belly up in numbers that would stagger people today. Railroad men in parts of the midwest also refused to ship grain for farmers, that meant they could not pay their taxes and lost everything, the same railroad men came in bought up land for the taxes…that is why they were called robber barons and that is why we have the teamsters today. They were originally organized to help ship grain. Two men, one to handle the reigns and one to ride shotgun.
In fact during Grant’s tenure in office people bought up all the gold, drove it up to very high prices and then dumped it on the markets triggering a panic that lead to actual starvation in the cities.
Honestly, I don’t think people have any idea what it used to be like in the days of laissez faire. Things could just go to hell over night.
In fact that is what happened to Latin America. When WW1 broke out the Europeans who had treated south America like its colony just pulled its money out of the continent triggering a collapse that they never did fully recover from.
Terrye on November 24, 2008 at 6:40 AM
I thought this was interesting, it was written by a man named Klinghoffer, I saw the link at Instapundit.
Subprime mortgages are a problem but they are not the cause of the collapse. The collapse was caused by an OPEC generated precipitous rise in oil prices. Subprime mortgage buyers could no longer pay their mortgages because too much of their pay check had to go to pay for gasoline. Yes, I know, gas prices have since declined but not before Humpty Dumpty, the American consumer, was broken.
Much of the economic development around the world rested on the willingness and ability of the American consumer to absorb a large portion of the excess global production especially from emerging markets. It was the role of the producing nations to enable the American consumers to fulfill its role, i.e, live above its means, by lending it the needed funds. All subprime loans did was to encourage poor people to join the national spending spree. The hope was that emerging markets consumers will slowly begin to follow in the footsteps of their American brethren enabling a careful rebalancing of the global economy.
Indeed, when Oil rich nations decided to squeeze the American consumer by not only raising oil prices but also by ending or lowering their investment in the American financial markets, they assumed that there were enough new consumers in Asia to replace the American ones. In other word, they assumed that the collapse of the US economy would not lead to the collapse of the global economy, most especially, the Asian one.
They were wrong. Instead of proving that the world no longer needed Americans and their dollars, they ended up proving that the US and its consumers were needed more than ever. Just note the post crisis rise in the value of the dollar and the enormous popularity of US treasury bonds.
So where are we now? OPEC got the American president it wanted but at an exorbitant price.
Terrye on November 24, 2008 at 6:44 AM
Kini:
I think the idea is to stop the bleeding so that more people do not lose their jobs, their homes, whatever. I am not justifying any of it, I am just saying that people want the government to fix things, they just don’t want it to cost any money.
Terrye on November 24, 2008 at 6:46 AM
But this was just personal wealth. The monetary system was not really affected. This is not just about personal wealth, but about the dollar, itself. This is about the ability of the world to trade. This is about one of the most integral systems to the operation of the world going down in flames.
On the bright side, the US will be affected less than most of the rest of the world, who have been leeching off of us for a long time, accepting our generosity and help while cursing us the whole time.
progressoverpeace on November 24, 2008 at 7:07 AM
Not that Citigroup is blameless, but I do wonder how much they lowered their underwriting standards in order to meet the demands of the Community Reinvestment Act and the hammer of the D.O.J. as pioneered by Janet Reno, Deval Patrick, and Eric Holder.
Buy Danish on November 24, 2008 at 7:10 AM
The misvaluation forced by the CRA propagated throughout the system – by hook and by crook and by threat of lawsuit. But the profits were enormous – especially after Fannie/Freddie really got the underlying market moving by taking inventory off the hands of lenders to encourage growth of the market – so once companies were forced to create the market, everyone jumped in to take part. That’s how I saw it.
progressoverpeace on November 24, 2008 at 7:17 AM
There will always be people out there who try to manipulate markets and transactions to screw other people. Robber barons are an example of this in a laissez-faire system. Many people have blamed today’s financial crisis on derivative transactions (e.g. credit default swaps) riding on top of securitized subprime loans. Obama says that “deregulation” (i.e., laissez-faire) in the derivative markets caused it. I, and other sensible adults, say that the problem is traceable to the doorsteps of Congress, Fannie/Freddie, and these freaking subprime loans (over 50% of which were made to minorities as part of a giant affirmative action program started under Carter and expanded by Clinton).
The real question you have to ask is, under what system are the risks from manipulation and corruption minimized? And given the absolute horrors perpetrated under communist regimes, and the abject corruption and tomfoolery that goes on DAILY in Europe, I’d say the government that interferes in private markets the least has the best outcomes. (Latin America, which is a stew of drug lords, communist rebels, and other various extremist groups, is not a good comparison.)
Outlander on November 24, 2008 at 7:21 AM
It seems to me, that many people think that the only reason that communism has not worked is because the “right” people have not been in charge.
Johan Klaus on November 24, 2008 at 8:14 AM
Who will bail out the out bailers?
Akzed on November 24, 2008 at 8:59 AM
Soylent Green is made of Glenn Beck!!!!
batterup on November 24, 2008 at 9:13 AM
You can link many of our current problems to a.) investor panic and unreasonable sell-offs and b.) a markedly slowed velocity of money by consumers.
Read: you can thank the media for spreading panic in what should have been a difficult but manageable situation… but I guess they’re still doing their part to make the Messiah’s coming look miraculous.
fiscallyconservative on November 24, 2008 at 9:20 AM
I hope so. Elections have consequences.
Vashta.Nerada on November 24, 2008 at 10:36 AM
I just realized that Saudi Arabia owns us.
PattyJ on November 24, 2008 at 11:33 AM
I wonder what liberals taste like…hmmmm.
Anyone know how to cook’em?
/cleans gun, counts ammo
Wyznowski on November 24, 2008 at 12:22 PM
Whew! When I saw the picture, I thought Iran was attacking NY!
Badger40 on November 24, 2008 at 2:22 PM
Greasy. No meat there. Better to make sausage outta them.
Badger40 on November 24, 2008 at 2:23 PM
The mayor of a Detroit auto manufacturing suburb was on local cable this morning. I didn’t catch his ID, but he said they are rescuing the financials who do produce nothing (and are filled with useless leeches I believe I took from his voice) while they are letting the big three which produce real goods and employ middle class workers sink.
Something to be said for his talk, because the big investment houses created fake instuments, and speculated them up, using people’s bank accounts and pension funds
while giving themselves million dollar salaries and bonuses.
Meanwhile, the mayor said, if we stop making cars, do we want to buy all our cars from China?
He is onto something people overlook. The Japanese moved production to the US so they could compete against the big three. If the big three are gone, they do not have to stay here. In fact, they are then competing against China for profit, and the first Chinese vehicles are coming soon to the US.
The Japanese have shown they will farm any and all production to China to increase profit as needed.
a very important quote from this article about the Citibank bailout
entagor on November 24, 2008 at 3:17 PM
Here is another key article
HSBC wouldnot rule out buying citi assets
Let’s bail out citi so HSBC can pluck it to finance Asia
entagor on November 24, 2008 at 3:24 PM
here is one more important article about the current CEO of Citigroup Vikram Pandit
entagor on November 24, 2008 at 3:28 PM
Last comment on this:
Incestous b*st*rds
entagor on November 24, 2008 at 3:28 PM
I think massive unemployment and social unrest might be a good thing. Perhaps a Republican majority in 2010? Might show the morons in Ohio and Pennsylvania that the Obamessiah was wrong, dead wrong. The American people deserve what they voted for, and good and hard.
federale86 on November 24, 2008 at 10:44 PM
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