Further and Further We go

The Dow Jones Industrial Average--otherwise known as the bain of our collective existence as of late--has sunk to a new low. It closed today under 8,000--its lowest closing since 2003.

I'm really out of ideas on this one. Or maybe I'm just cranky today. Either way, let's get it together, America. We're falling apart at the seams.

The Bailout is "Working"

Here's a joke for you: two bald dudes walk into a Congressional hearing room and testify that a multi-billion dollar mess is working.

That's it. There's no clever punchline.

That's what Ben Bernanke and Henry "Hank" Paulson are doing today. They're sitting in front of members of Congress and lying through their teeth. Either that or they're delusional. I can't tell yet.

Meanwhile, the Big 3 and their entourage are in D.C. today for hearings on their measly $25 billion bailout request. People ask whether the auto bailout will work, and skepticism is more than healthy given the failings of our last bailout. I guess for this commentator, the differences are enough to give it a go. The CEOs are placing their mea culpa at the feet of a very angry and actionable Congress, though, so who knows what the outcome will be?

What I do know is this: there are American families hurting and they'd like to be next in line for this government cheese.

Why John Doesn't Get Joe...or Jane...or John...or Julio....or Jamal

Between you, me, and well, the internet, I have to say that I'm developing quite the crush on Robert Reich. In fact, in the debate last night I was crossing my fingers that Obama would speak his name as one of his advisors. He of course dashed my dreams and didn't. What Obama neglected, I'll bring to light.

One of the things that has irritated me so much about the way in which the current "bailout" has taken place, was the blame that the American Worker and the Middle Class and Working Class folks out there have taken the shaft from every side. (And I'm not talking about Joe the Plumber, who has a recession proof job and can afford to buy a business.) Not only are they being screwed because they can't get credit to afford basic things, but they need credit in the first place to buy basic things. And to add insult to injury, there are people out there who consider themselves concerned and compassionate people who continue to blame those who have suffered most in this crisis (and continue to suffer the most) as a way of explaining the problem. It's like you can't talk about predatory lending without throwing in some quote about how some people abused the system. You can't discuss credit without saying that people live beyond their means. You basically can't talk about the have nots without faulting them for having not and wanting more.

I'm not here to say that there aren't people who live beyond their means and that I haven't been one of them. But what I am saying is that we have got to stop demonizing the working men and women of this country who have to get credit cards to pay for basic necessities because wages are stagnant and jobs are few and far between. People who took on larger mortgages than they probably should have were convinced by so-called experts that it was not only okay, but a good way for them to build equity and credit. Moms and Dads who use the plastic at the pump to get to work aren't doing it to afford a vacation, they're doing it to afford a life. So for those who don't have those problems and for those who never have had those problems, it's not surprising that the average John, Jane, Julio, Joanna and Jamal are being lambasted for doing what they needed to in order to get by and, god forbid, get ahead.

And to that message, comes Robert Reich's latest commentary. It's short and sweet and to the point: the American worker has been taking on more than s/he could handle because s/he has no choice. Very few Americans are vacationing, let alone taking luxury vacations. Very few Americans are purchasing new cars, let alone fancy ones. Very few Americans are taking on new homes, let alone ones too big for their budget. And yet we cannot seem to demonize the true demons without throwing some dirt in John, Jane, Julio, Joanna and Jamal's faces. It's a classic fault of the limousine liberal and it's coming out in places I never expected. I expect this commentary from GWB. I don't expect it from seasoned labor lawyers.

The thing is that today's American Worker is damned if she does or doesn't, whether she spends or saves, whether he works or not. Joe the Plumber is an exception, not the norm. And even if he were, McCain would still fail to grasp the ways in which his policies would kill him and bleed him dry.

And Boom Goes the Stock Market...again....today.

Just a reminder that a 700 point drop at close isn't a good thing.

As if you needed one.

Is this what it felt like in December 1929?

I just ask because every day there's another reason to doubt the stability of our economic system. Today's lovely news--the Dow has closed below 9000 after dropping 600 points in a half an hour at the end of trading.

I'm not kidding. I am not making this up.

I often wonder what people though about in the days and weeks leading up to a major catastrophe. Like what did we think on September 10, 2001? What were our main issues. I'm now wondering what we were thinking September 14, 2008, because it seems since September 15th, we've been nothing but screwed.

I'm not the only one who questions whether this is another Great Depression.

There used to be one Great War. People called it that because it was the biggest war of its time and the world would never see the likes of it again. Then World War II happened. Are we on the verge of World Depression 2?

A Note to Our Leaders Upon the Passing of the "Bailout"--Don't forget the rest of us

Today is a sad day. Today, Congress finally passed the Bailout. As you know, I'm neither for nor against it, though I do believe that it's probably a necessary evil. Nonetheless, it is passed and on its way to GWB's desk right now.

The Bailout Congress just passed provides Wall Street with the means to pick themselves up by the bootstraps--something they have always been able to do because, unlike many Americans, they have bootstraps in the first place. And although there were numerous ways to skin this cat, they chose this one and it's fine to me. For now.

My great fear though is that we will now stop working on the crisis and leave it to the next president, the next Congress to handle. I think Congress should call off any election period recess and keep working on a housing bailout bill and an automotive industry bailout bill and an employment bailout bill and so on.

For ninety-year-old Addie Polk, the bailout was too little, too late. Wednesday, as sheriff's office tried to foreclose on her Akron, Ohio home, she took matters into her own hands and shot herself. Now Addie is in the hospital and the home is in foreclosure. There is no happy ending to this story for now, because congress hasn't passed Ms. Polk's bailout yet.

So congrats, Congress. You did something necessary and patted yourselves on the back. Now get back to work and make sure that the Addie Polks of the world suffer no more.

Not The Kind of Record You Want

The Dow Jones Industrial Average suffered its biggest point loss in its history.

Rumor has it Tent Cities are popping up across the nation.  If we start setting up tent cities in Central Park, let me know.  

I think they should call it a day.

The stock market has taken a nose dive, the likes of which hasn't been seen in a long time. Even the events of my birthday weren't this bad. Apparently, Wall Street, like every other street in America, has lost faith that a true measure to save the economy will pass.

It seems every day for the past two weeks we have been waking up to more incredible news. I thought this was a one-week thing, but it continues like a daily alarm clock ringing--only we can't hit the snooze button. Today it was Wachovia. Pretty soon there are going to be two or three banks in America, and although they'll be strong, I'm not sure that's a good thing.

I don't have time to read the 110 page tome that is the "Bailout Bill". But you can read it here, if you want.

I'm not alone in this questioning of the bailout. There are many people like me who question whether this bail out will work, when it will work and what it will do to any hope of getting help to the people who really need it. As you can see, my concerns are multi-fold.

First, will this bill even work? Are the firms that have bad debt going to be around to take part in the clean up? Wachovia won't be there. Washington Mutual won't be there. Bear Stearns won't be there. Leheman Brothers won't be there. So basically about 50-75% of the people who created this mess have left the party before it ended and therefore can't help to clean up. Is this enough?

Second, if it works, when will it work? Sure, the world has become a much faster place with a pace that rivals Robin Williams on his most crack-ridden day, but at the same time, how is it possible for just a mere vote of confidence to lift the markets? And really, that's what the bill is intended to do for right now.

Third, regardless of when and if it works, will this end the sense of urgency that allowed for bipartisanship in the first place? In other words, what about struggling home owners like Mom and Dad Grace. Will they get anything down the pipeline? Or are we done? I fear that once the urgency is over, the work will not get done. So health care, housing, etc., will just be trampled on in the meantime. I don't think the average American had high hopes of Congress helping them, but damn it, if this passes, they'll have to lower their expectations even more. And that just ain't right. Maverick McCain might think the fundamentals of the economy are strong and the American worker is strong--but if the American worker has no work, then the whole thing falls apart.

We need a New Deal, folks. Corporate bailouts without populist policies to aid the everyday American are nothing more than a screendoor on a submarine. DadGrace would tell you that.

As I write this, it appears the bailout bill has stalled and might fail.

I hope by the end of the day we have an economy at all.

If this is how the bailout is going to help, count me out.

Stocks are going to tumble this morning. Just freaking fantastic.

Prediction: Recession (Depression) 2008

This bailout program is only going to string out the inevitable. Bailing out companies and putting big business on corporate welfare is only going to help the rich and even then, only in the short run.

Remember the New Deal? Yeah...much better. The thing is that this bandaid is only going to conceal the problem, so the rich get richer and the poor...well, you know.

Right now listening to GWB blame the American people for the financial situation of the country is a true joke. Bailing out big business is only good if the people on main street can afford to buy big business's product.

John, You Are Straight Trippin', My Friend

John McCain has asked to postpone Friday's debate (because he's not ready and he'll know he'll lose) because of the economy.

Um, first of all...nice try.

Second of all, way to then encourage Obama to do the same so if he doesn't he looks like a dick.

Third of all, WHAT ARE YOU GOING TO DO, JOHN? Sit in a room and start working on an old-school adding machine with an accountant's visor? Come on.

Fourthly, cut the games. If the economy is going to hell, don't Americans need to hear about your stance on the issues more than ever?

What a sideways move, you jerk.

And didn't Abraham Lincoln campaign during the Civil War? Didn't Reagan and Carter campaign during the hostage crisis? Didn't FDR campaign during the GREAT FREAKING DEPRESSION???? And have you even admitted this is a recession yet? No, of course not. So why stop the campaign?

Leave it to the Republicans to leave me speechless with their backwards logic.

Remember how McCain was touting "change". If this is change, then count me out. STAND UP AND DEMAND THE DEBATE HERE.

Imagine There's No Money

It's easy if you try. In fact, it's easier than ever before.

Though I appreciate the banter yesterday, I can't help but point out that the so called "Free-Market Capitalists" that stopped by yesterday have some 'splainin' to do. The market just sank again.

For the record, here is my problem with "Free Market" economics. First, it's a total misnomer--the bailout of AIG today is just an example of that. People who believe in the so-called "Free Market" actually believe in just being left alone when times are good. When times are bad, Uncle Sam is called in to bail them out. That's not a free market. That's a co-dependent market. (For the record, I'm pretty sure these people also think that pulling one's self up by one's bootstraps is always a possibility--a topic for another day...we're talking macro, not micro.) If you want to bail out important companies, that's fine--at least say so.

Second, I do believe that corporations should be taxed fully. What do I mean by this? I believe creating loopholes is a bad idea. Tax credits for good behavior (providing health care, keeping jobs in the States, etc.) is a great idea. But tax credits require monitoring--and if you claim to want a "small" government, you can't also claim that tax credits are a good thing. The two ideas are incompatible. The reason the tax code is so fat is because corporations and people have taken advantage of every inch of that thing. And in the same way in which a bad parent disciplines, the government has seen fit to create more rules instead of enforcing the ones they have--because enforcing creates more government.

Which brings me to my third point--government is not the enemy. The fact that there are examples of governmental waste does not make it unfit. In fact, there are studies that show that government-funded and operated Medicaid programs are much more efficient than privately owned plans (yet conservatives want the tax-credit-for-private-insurance-program...go figure). The difference? No one profits. And frankly, no one should profit from health care.

These are the facts. I appreciate the comments yesterday, but many of them had to do with Obama's personality or McCain's alleged "maverick" streak. Let's talk basic economic facts. That's a conversation I'd love to have.

Happy Birthday Sam Grace! Sorry the Economy is Going to Hell.

Yes, ladies and gents, it's my birthday. You can read all about my crazy weekend here.

In not so great news, it appears that the economy is hanging by a thin thread...not even good strong material. It's like a shitty poly-blend thread that wasn't formulated right. Oil was down to $96 this morning and is now at $94, which normally would be a great thing, but such a quick drop is nothing helpful to an already unstable market.

For Christ's sake, even George W. Bush is acknowledging the mess of it all. Well, sorta. Hell, even McCain was blasting bank regulators (probably right before having lunch with them...maverick my ass).

No one is safe...Merill is bought out, Lehman is down the tubes, everyone else is in jitters just waiting for the closing bell. It's kind of awkward to think my birthday might be remembered for something like this.

We're being told not to spend, but screw that. I'll spend what I want on my birthday. And tomorrow, when the economy collapses, it'll be just grand.

Does Anyone Still Think This Isn't a Recession?

51,000 people lost their jobs in July alone. The jobless rate climbed to 5.7%. This was the seventh consecutive month of job constriction (loss of jobs).

I think it's pretty clear we're there. America's economy is in the shitter, folks. Stop waiting for someone important to say what we all know this is--a giant mess.

What staggers me isn't that we're in a Recession. These things happen and with GWB in power, it was bound to happen (cutting taxes for the rich doesn't do anything but leave the government with less money and less jobs and thus people who can't spend). What truly staggers me is talked about here: when the big businesses are in trouble (Freddie Mac and Fannie Mae or Bears Sterns), Washington jumps through hoops to make things happen. But when the average Jane on the street can't get a job to save her life, Washington ignores her plight.

I couldn't agree with this any more:

The bailouts are rewarding the very people and institutions whose reckless behavior caused this financial mess. Yet government demands nothing from them in return -- like new rules for prudent behavior and explicit obligations to serve the national interest. Washington ought to compel the financial players to rein in their appetite for profit in order to help save the country from a far worse fate: a depressed economy that cannot regain its normal energies. Instead, the Federal Reserve, the Treasury, the Democratic Congress and of course the Republicans meekly defer to the wise men of high finance, who no longer seem so all-knowing

So don't be surprised when these bailouts turn into more trouble than they were worth. I know I won't.

Instead of making more social safety nets for the average American, as Robert Reich has suggested, we're making safety platforms for the very businesses that caused this mess to begin with. And why are we doing that? Well because they paid for the campaigns of those in power.

Don't get me wrong--we need to bail out these companies to a certain extent to save ourselves. But if all we do is bailout the bad guys, we're left no better off and maybe even a little worse for wear.

So We Can Nationally Bail Out Businesses But Not People?

Don't get me wrong, I'm all for us propping up the housing industry as much as is necessary to get it moving in the right direction, but I don't understand the backwards thinking that allows some people (read: Republicans) to believe it's hunky-dory to give hand-ups to giant mortgage companies like Freddie Mac and Fannie Mae (while at the same time going to war against shady lending practices (read: what got these people rich in the first place) and not to give hand-ups to individuals who, it has been scientifically shown, make this economy work.

Where's Robert Reich right now?

Nope, We're Not In A Recession, Virgina

The financial market has pretty much hit the skids today. Any progress that was made yesterday in the slight upswing was briskly escorted out the door and asked to never return.

Not only are Fannie Mae and Freddie Mac on the brink of total meltdown, but they sent the stock market tumbling to its lowest point in over 2 years.

And I'm sure somewhere, GWB is just smiling that stupid shit-eating grin of his and going about his pleasurable day. Grrr.

Can someone get Robert Reich on the phone and just hand control of the economy over to him? This Paulson guy seems about as helpful as pay toilets in a diarrhea ward.

It's Official!

Pause your Tivos, mark your diaries and listen up:

A recession is here.

That's right folks, the majority of economists surveyed believe that the U.S. is in fact, ass deep in a recession. Well, maybe not ass-deep yet.

Never to fear, though, fine fellow-citizens: Samantha Grace is here to translate the Wall Street Journal's saddening news.

"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.

Translated: It's pretty much for sure. Beyond a reasonable doubt=highest burden of proof under the law. Just FYI.

The Commerce Department said Thursday that retail sales tumbled 0.6% in February; sales excluding volatile auto and parts decreased 0.2%. The decline reflected a sharp slowdown in consumer spending, the primary driver of U.S. economic growth, as Americans grapple with high gasoline prices and the credit crunch, as well as drops in home values and other asset prices.

Translated: hoes ain't buying shit because hoes is broke as fuck.

Twenty-nine of 55 respondents said they expect the economy to contract in the current quarter and 25 expect it to do so in the second. The average of all the forecasts is for meager growth -- just 0.1% at an annual rate in the current quarter and 0.4% in the second.

Translated: this ain't goin' away anytime soon.

Although the classic definition of recession is two consecutive quarters of declines in the gross domestic product, Mr. Stanley pointed out that the National Bureau of Economic Research, the nonpartisan organization that is the official arbiter of when recessions begin and end, doesn't necessarily follow that definition. "If you go back to the 2001 recession, there was only one negative GDP quarter, and there might not even be one negative quarter in this recession," he said.

Translated: GWB doesn't have a leg to stand on when he says we don't have a recession on our hands and we're only experiencing a "downturn".

The economists also expressed growing concerns that a 2008 recession could be worse than both the 2001 and 1990-91 downturns. They put the odds of a deeper downturn at an average 48%, up from 39% in the previous survey. Mark Nielson of MacroEcon Global Advisors said that "we recognize the previous two recessions were mild and, if a recession does occur, it is likely to be slightly worse than the previous two."

Translated: we're screwed beyond any screwing that people of my generation can remember. so lube up.

Futures markets Thursday priced in certainty of at least a 0.5 percentage point cut in the Fed's rate target and up to 90% probability of a 0.75 point cut. Officials had, prior to this week, appeared unconvinced a 0.75 point cut was needed, given signs that inflation psychology is worsening. But those views may have been affected by continued upheaval in credit markets and the weak retail sales and employment data. Market participants say this would be a risky time to cut less than investors expect. The Fed will have to weigh the urgency of addressing the continued credit crunch against the risk of appearing unconcerned about inflation.

Translated: Bernake is going to mess it up even more. Too many cooks in the kitchen perhaps?

One thing is clear: The darkening economic outlook has made Ben Bernanke's job less secure, especially with a new president about to enter the White House. The economists gave the Fed chairman just a 59% chance of being reappointed in 2010. "If a Democrat is elected he won't be reappointed, and [presumptive Republican presidential nominee John] McCain may opt for another, too," said David Resler of Nomura Securities. "The problems occurred on his watch," added Ram Bhagavatula of Combinatorics Capital.

Translated: WELL DUH.