No one I know is changing their behavior either. Your gym membership or weekend getaway is a drop in the bucket–the hole is so big it won’t be filled with $500, maybe $500,000 would do it.

Everyone I know figures they will be working until they die, so might as well enjoy it now.

“Had there been no stimulus, I think we’d have gone right off the edge,” he said. “I think we’re pretty close to the edge anyway, to be very brutally blunt about it.”

He’s telling you like Obama told him to tell you AllahPundit. Are you that silly?

E.g., is Specter on the level here or is he trumping up the extent of the crisis to justify his stimulus vote after the fact as a necessary heresy that saved the world?

No, dear. He is doing neither. He’s just setting up for his next vote for Stimulus II. He’s just getting geared up to explain why he had to agree to spend more than the aggregate of Congress from Washington to “W” combined in one stimulus package and THEN why that’s STILL not enough.

*sheesh*/rolls eyes

If this rule was relaxed for a few months the change would be remarkable.

I do think that the Administration will do this at a politically advantageous time.

Specter has dedicated almost 50 years of his life to public service.

Proud Rino on March 9, 2009 at 9:30 PM

Just like the Kennedy’s. They are incapable of finding employment in the private sector where they actually are answerable to a boss.

A friend who lives in Manhattan told me the other day that no one she knows is behaving as though we’re on the verge of falling off a cliff. I’m not behaving that way myself, frankly: I don’t have many luxury expenses but I still order out as much as I used to, still keep up my gym membership, etc.

True. My job for now seems safe but every extra money I get (tax refunds, bonuses, etc.) goes straight into a savings (bank not mutual fund) account. Got to build up the ‘disaster fund’.

The banks have money, but they are sitting on it, because they aren’t sure, in this era of Stimulus, what to do.

Banks are not lending because they have zero capital, and the TARP funds have not filled the hole (which is of unknown depth). They are also not exposing themselves to interbank risk because they know that other bank’s balance sheets are as full of BS as their own. The program appears to be to print away the debt. Consequently, once the asset deflation cycle spins down, the US will experience an inflationary cycle as it never has before.

Deflation first. Then incredible inflation.

I personally can’t wait to see Roubini’s reaction to the stress test results, if those are publicly released.

DrSteve on March 10, 2009 at 9:29 AM

I just have to say that I laughed my head off when I heard what these “stress tests” were. They are nothing more than the normal risk analysis that should have been done on those portfolios in the regular operation of those businesses. How can anyone carry such huge portfolios and not run any risk analyses to see what the P+L will be under different scenarios? That is fraudulent behavior, by my reckoning – from the companies all the way to the oversight committees in Congress. When I had first heard Vikram Pandit say that Citi hadn’t taken the possibility of a stagnant, or falling, housing market into account in analyzing their risk, since they considered it “highly unlikely” [paraphrased] my jaw dropped to the floor – especially as we had just come out of a major housing slump less than 2 decades ago.

Oh but gas prices are going up for no f’ing reason.
They don’t want it to get better. They want us all on food stamps.

johnnyU on March 10, 2009 at 12:02 AM

They are going up because the formulation has to change for spring. More chemicals need to be added to comply with regional emissions regulations. Crude has gone up a little, and demand has increased a bit, but the bulk of the change is government intervention.

That sounds like you’re applying a microeconomic solution to a macroeconomic problem. Bad idea.

orange on March 9, 2009 at 10:40 PM

Not a bad idea, actually, and it’s done all the time. There are more game-theoretic models of central bank behavior, for example, than you can shake a stick at. What else is that but the application of micro tools to macro topics? AP’s just complaining that the Congress keeps signaling “wet” (if you know the models you know what I’m saying here). Public Choice and Social Choice theory are also micro, aren’t they? And aren’t they relevant here?

I personally can’t wait to see Roubini’s reaction to the stress test results, if those are publicly released. He says the banking sector in the U.S. is insolvent. Obama’s acting like he thinks it isn’t. Chances are the stress tests are gonna agree with the Boss.

Meanwhile, Krugman’s sounding more and more ticked off.

My professional opinion as an economist, offered here at the market-clearing price, is that the situation is getting worse, and at a pretty good clip. There are too many mutually reinforcing processes trending in the wrong direction at the moment, and the Government — the whole of it, mind you — has pissed away its credibility and its latitude in making big moves simultaneously. They’re running out of ammo.

Specter: The public’s not being told just how bad the economy is

Economy: The public’s not being told just how bad Specter is

Specter has dedicated almost 50 years of his life to public service.

Proud Rino on March 9, 2009 at 9:30 PM

Our economic problems are enormously serious — more serious than is publicly disclosed.

Arlen Spector on March 9, 2009

Riiiiiiight… sounds like he’s dutifully acting as a public servant to me! /sarc

Ach, smoking doesn’t help stress anyways. Sucking my thumb and rocking slowly back and forth is healthier, right? I’m sure I’ll have to do it in the dark because my lovely Mr. Kaine just passed an energy tax on all those evil people who use electricity.

jusgottabeme on March 10, 2009 at 1:59 AM

He also just signed a tobacco ban in most restaurants so there’s another reason to quit smoking.

Translation: More fear mongering for votes.
We won’t go into a depression, things will get better sooner than later and then Specter can say his wise actions stopped the depression and voters should vote for him.

How much additional capital do the US banks require to become solvent. If the Fed and Treasury know, they’re not telling. Why not? And if they don’t know, then why did they embark on a program to fill in a hole of unknown depth with OUR money?

shaken on March 10, 2009 at 8:10 AM

Think about this for a minute. Is the money earned but not being spent by people being put in mattresses?

View the Government’s money as a pressure hose, building a hole of uncertain depth. The banks have money, but they are sitting on it, because they aren’t sure, in this era of Stimulus, what to do. If they try to put their money in one area and the Government hoses (by running the presses 24/7) that same area, they’ve just lost a tremendous amount of profit, because they are competing with the Government, which is not a money-maker. So they sit and wait until they figure out which way the Stimulus is blowing. They’ve got a lot of time to choose the best places to invest. Sadly, most of the rest of us don’t.

How much additional capital do the US banks require to become solvent. If the Fed and Treasury know, they’re not telling. Why not? And if they don’t know, then why did they embark on a program to fill in a hole of unknown depth with OUR money?

shaken on March 10, 2009 at 8:10 AM

I had assumed, with the first TARP, that the purpose of that money was to provide support for, or quarantine, a skeletal structure in our financial/monetary system so that the rest could be allowed to fail without worrying that nothing would be left to rebuild from. But … they decided not to take that tack. Instead, they pissed it away – thanks to the idiot Congress shoving through one of the cr#ppiest pieces of legislation to ever see the floor.

So now, we have been transferring economic risk (which we can survive, easily) to monetary risk (which is much more dangerous) and now The Precedent and his lunatic band in Congress are strangling the economy to insure a monetary cataclysm. Gird your loins.

Right there is the fundamental issue… nobody on the bridge has a map, but they are shouting orders as though they had a map.

The economy recovers when goods and services of value are produced at a rate that exceeds the cost of servicing the debt on balance of trades. It’s difficult to see that happening if capital investments are zilch.

So, we’re going to launder each other’s shirts back to prosperity with newly minted Monopoly money?

Consider the ramifications of supply chain distruptions – basic materials needed for food packaging and distribution.

The economic neutron bomb has already detonated. I don’t doubt for a second that Fed, Treasury and now WH know it.

fogw on March 9, 2009 at 10:36 PM

+100 I live in Pa also. Spector needs to go.