Today In Troubling Financial News

Dont know MS.
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A freind of mine came back from the Mucleshoot reservation with a deck of cards. Guess what brand they were?
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Paulson...

I think you missed the biggest financial news of the day:
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Credit-card industry may cut $2 trillion lines: analyst
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Mon Dec 1, 2008 4:06pm EST
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(Reuters) - The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.
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The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.
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"In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent."

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Want to see the economy shut down for a few years? Here it comes...
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Wait... You mean we have to pay for all this stuff?
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I bet we bail out the banks (again).

And what about the other $3,916,000,000,000?
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Where the hell did that money come from?
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Inflation, here we come!

Oh, yeah.
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To elaborate:
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We can account for $125,000,000,000 'cause that was from the sneaky Paulson tinkering with 382. And, actually, I have to toss back $350,000,000,000 because George "I'm Sorry" Bush says he left it for Obama to spend.
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Wow, so lets do some artihmetic here:
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4,616,000,000,000
..-350,000,000,000
..-125,000,000,000
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4,141,000,000,000
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Hmmmm.
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That means there's a whole lotta money that came from somewhere.
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Did Uncle Sam wake up with an envelope from the tooth fairy?

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.
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Does anyone else see anything wrong with this state of affairs? It sounds to me like Oppenheimer & Co. are acting like credit cards are completely independent of job income. Like a card you sign up for, and it gives you free money.
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That notion, plus this one:
The U.S. Treasury lacks a "coherent plan" for distributing the bailout money
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makes me ask: Who the hell are these people? And why are they so goddamn stupid? Why do they have to do the stupidest possible thing every goddamn second of the day?

When did all the financial problems start? I was at lunch.

gysgt213,
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The problems started late yesterday. It was announced that we're in a recession.
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They will be announcing the New Depression© as soon as the soup lines completely encircle one city block.

Palininatowel-Well thank goodness they made an annoucement.

Well this is important.
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Two things stoked Erin Nash's anger when she trolled the malls last year. First, most stores trumpeted their “holiday” sales. Second, every sales clerk robotically wished their customers “Happy holidays.” The word “Christmas,” Nash felt, had been discarded by the retailers like a wad of crumpled wrapping paper.
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So the Fort Benning, Ga., resident took a yuletide stand.
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“It became a test to me: I began wishing cashiers a ‘Merry Christmas' to see if anyone would actually wish me a ‘Merry Christmas' back,” Nash said.
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http://www.msnbc.msn.com/id/27890640/

Very weird that TIME's deal with WordPress includes WordPress logo in place of TIME.
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We are now morphing towards a world where the government fist is being substituted for the invisible hand, where regulation trumps Wild West capitalism, and where corporate profits are no longer a function of leverage, cheap financing and the rather mindless ability to make a deal with other people's money."
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It's weird that MS highlights this, because it makes absolute no sense. Perhaps the two clauses are meant to be entirely independent? The second one does indeed seem to be the case, or rather, should be. That is, credit markets should be regulated. But I don't understand where the first one comes from. There's no 'invisible hand' involved in fraud.

“It became a test to me: I began wishing cashiers a ‘Merry Christmas' to see if anyone would actually wish me a ‘Merry Christmas' back,” Nash said.
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Nash continued, "And when they didn't I left a special mark on the door. For later"
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Honest to Pete, why are people so anxious to feel slighted?

Gem from John Cole's comment section. Michael should appreciate this:
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THE TRAGEDY OF THE AMERICAN AUTOMOBILE INDUSTRY:A Play in Three Acts
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Dramatis Personae
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BIG THREE, a manufacturer of automobiles
UAW, Big Three's employee
MITT ROMNEY, an idiot
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ACT ONE
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BIG THREE: I have plans to build automobiles, but I need labor to do so!
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UAW: I will labor for you if you will pay me $40 per hour.
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BIG THREE: I will not pay you $40 per hour.
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UAW: But I need to save for my inevitible retirement, and any health concerns that may arise.
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BIG THREE: I will pay you $30 per hour, plus a generous pension of guaranteed payments and health care upon your retirement.
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UAW: Then I agree to work for you!
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ACT TWO
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UAW: I am building cars for you, as I have promised to do!
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BIG THREE: I am designing terrible cars that few people want to buy! Also, rather than save for UAW's inevitible retirement when I will have to pay him the generous pension of guaranteed payments and health care that I promised, I am spending that money under the dubious assumption that my future revenues will be sufficient to meet those obligations.
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ACT THREE
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UAW: I have fulfilled my end of the deal by building the automobiles that you have asked me to build.
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BIG THREE: Oh no! I am undone! My automobiles are no longer competitive due to my years of poor planning and poor judgment!
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MITT ROMNEY: This is all UAW's fault!
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http://www.balloon-juice.com/

MS: Thanks for the NYT link. It doesn't explain my stupidity question, though.
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Gunny: Very nice, I could hear the warbly melodrama piano music playing in the background as I read it.

The question we should be asking ourselves isn't why Erin Nash feels a need to impose her religious faith on strangers. The question we should be asking is why MSNBC is giving her a platform to validate her intolerance to millions of other readers who might otherwise not even think of it.

In other news:
The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

Here's where the real rip-off started. The same companies that proudly squeeze every ounce they can from their labor force, promote payday loans, rent-to-own schemes and 18% interest lines of credit as a way to compensate for the missing living-wage salary and then are utterly surprised when the whole house of cards come crashing down. Notice that it's the banks who end up first in line at the Federal teat and laborers who get maligned for their outragous desire to be able to retire.

TPM highlights this excellent PBS NOW video on the ratings agencies role in this mess. Must see.
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A Standard & Poor's internal email (pdf) from December 2006, in which an employee states: "rating agencies continue to create [an] even bigger monster - the CDO [collateralized debt obligation] market. Let's hope we are all wealthy and retired by the time this house of cards falters."
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http://www.pbs.org/now/shows/446/index.html

"Hey 53_3, I don't think the 382 tinkering counts, since it is about future tax revenue."
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Thanks, MS.
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Holey Moley, Batman!
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Where the pluperfect hell are we going to get this 7.something Godzillion dollars from? Borrow it? Print it?
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So, we've spent about $1,400,000,000,000 that we don't have, and we still have to pony up 5 Godzillion more. So we reduce future revenues by not only the $125,000,000,000 (middle), but we are giving it back as refunds a la ECAP.
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Hells bells! That's half a years GDP, we've already borrowed from nearly everyone on the rest of the planet, so how in holy hell are we supposed to get our hands on that kind of money?
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To me, it seems there is only two ways, barring some "theoretically sound" shell game concocted by some economist somewhere:
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1. Taxes
2. Printing Press
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Now if we aren't going to do #1, that leaves #2, which, uh, I hate to say, but do I really need a degree in economics to figure out what's going to happen here?
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I'm guessing it ain't going to be "deflation"...

The MSNBC reporter coulda saved a lot of time by just going and asking NBC management why they don't say "Merry Christmas" on their holiday promos.
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Me, I'm gonna go to some mall in Jersey and walk around saying "Satan rules."

"Though I still think there is a bit of knee jerk is summarizing Romney's bankruptcy plan as it's-all-labors-fault, and then accusing me of holding that view."
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Michael-Just so we are clear. I didn't accuse you of holding any view other than this strange appreciation for Romney has Auto Czar. Not that you blame it on the unions. I do think though that Mitt Rommeny would not work well with a union.

"But the unions have to be part of the solution."
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Michael-By the way this is a good point. Did any of the big 3 bring union members to the hearings? Do you think it would have been a good idea to include them? I would have used them as human shields at the first hearing if I was in the hot seat and had them to deploy.

And I'm willing to say also MS that I was wrong too about you and anti-union kneejerk sentiments.
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So you have my apology on that.
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Orgainized labor has it's place, though, and lest one forget, that the middle class of the '50s and '60s was built by the labor activists. Their reign, however, ended with the less-than-illustrius "trickle down" theory and the demise of the SWE family...

Maybe Romney's history of anti-employee "management" and layoffs at Bain make people a tad suspicious.

MS--
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You realize it's Gross's sentence I'm talking about.\
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It's grammatical. It just doesn't make any sense.
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the government fist is being substituted for the invisible hand
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Or maybe what I mean is that it is just stupid. If he's only talking about financial markets, then it makes no sense. There's no invisible hand operating here:
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leverage, cheap financing and the rather mindless ability to make a deal with other people's money.
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What happened was fraud. AIG, in particular, took money to insure the creditworthiness of instruments that it didn't have the capital to insure. That's no more invisible hand than a Ponzi scheme (no, I am not saying this WAS a Ponzi scheme.)
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The idea that regulating financial markets has something to do with government fiat is ridiculous. Not allowing Merril, Goldman, Lehman, and the other two investment banks to adopt 30-1 leverage would not have been ruling by fiat. Nor would going back to Glass-Steagall amount to government fiat.
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Jamming the two unrelated sentences together is jarring, but I think that's mostly because the first one doesn't make any sense.

Maybe so, but people should remember that the Republicans, as we knew them, are extinct and I don't see why we need to please them.