Archive for September 28, 2008

Chronicles Of Depression 2.0: #272: Countdown

September 28, 2008

There are now only six days left.

All Chronicles of Depression 2.0 posts.

Chronicles Of Depression 2.0: #271: GM

September 28, 2008

General Motors stock in just one year:

52-Week High (10/12/2007): 43.20
52-Week Low (07/15/2008) 8.81

Half of me wants to be gleeful because of the smugness of the bastards for decades.

Then the other half of me realizes this stock’s drop is going to impact — has already impacted — lots of retirement accounts.

Our system is one of mutual hostage-taking.

Chronicles Of Depression 2.0: #270: Fortis Falls

September 28, 2008

Chronicles Of Depression 2.0: #253: Fortisless than 36 hours after posting that, Fortis fell.

Huge European bank fails
European financial giant Fortis partially nationalized. Three governments to pour 11.2 billion euro ($16.4 billion) into the bank.

BRUSSELS, Belgium (AP) — Dutch-Belgian bank and insurance giant Fortis NV was given a 11.2 billion euro ($16.4 billion) lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said Sunday.

Belgium’s Prime Minister Yves Leterme said the bailout shows account holders and investors that Fortis will not be allowed to fall victim to the global credit crisis.

Leterme announced the deal after weekend talks between the three countries, European Union and national banking officials.

The deal will force the bank — which has headquarters in both Brussels and the Dutch city of Utrecht — to sell its stake in Dutch bank ABN Amro, which it partially took over last year. Fortis paid 24 billion euros for its share of ABN.

Emphasis added by me.


Under the bailout, Belgium will invest 4.7 billion euros ($6.88 billion) and the Netherlands 4 billion euros ($5.86 billion) in Fortis’ banking operations in the two countries. In return, they each receive 49 percent ownership in those national arms of the bank.

Luxembourg will invest 2.7 billion euros ($3.95 billion) in the bank’s Luxembourg operations, also for a 49 percent stake.

The deal, orchestrated by the three neighboring countries and EU Central Bank chief Jean-Claude Trichet, is meant to restore confidence in the bank before the reopening of markets on Monday after a tumultuous week in which Fortis’ shares imploded.

Emphasis added by me.

I’m wondering what that news is like for Europeans. It is like our A.I.G.? Or is it like CitiGroup? Either way, it can’t be good and can only add to the jitters over there, which is falling into recession fast.

Chronicles Of Depression 2.0: #269: Video 1

September 28, 2008

Brother, Can You Spare A Dime?

In the early 1980s, I came across a shocking and extraordinary book called American Pictures by Jacob Holdt. I thought I knew what being poor was. The photographs in that book — taken in the 1970s! — opened my eyes to even lower levels of Hell on earth.

Poor whites in Mississippi

Poor whites I always found the hardest to photograph — at least in the USA where they have deeply internalized the prevailing American philosophy — that you are yourself to be blamed for your own misery. Thus they are also robbed of the dignity and pride characterizing the poor in other countries.

There’s an online version of the book.

Chapter nine:

What soon came to interest me most was not the dead bodies, but the live ones -– people in whom everything was extinct.

These exhausted wretches, who earlier had managed to survive by working hard seven days a week like the other slave workers, had slowly succumbed and were now just lying and waiting to die.

For some people, it’s still the Great Depression.

Chronicles Of Depression 2.0: #268: Asia B.M.

September 28, 2008

I guess Asian markets still don’t open for another 45 minutes (7PM EDST). I grabbed this Before Monday snapshot from Yahoo Finance.

Click = big

CNBC is in another hour of infomercials. A promo stated financial programming won’t resume until 8PM EDST. And it looked like a taped program. That doesn’t seem right to me. We’ll see.

My Reaction To Sanctuary

September 28, 2008

Someone whose name I’ve forgotten after the trauma mentioned Sanctuary on Twitter.

Sanctuary was pointed to at Sci-Fi Channel’s site. Unfortunately, the propellerhead who did their site stuck so much frikkin Flash on one page that I couldn’t get to the video to play!

So, like everyone else, I went to YouTube.

Within five minutes of episode one, I wanted to bail. It annoyed me slightly less than Gemini Division (which made me want to die after five minutes!), so I stuck with it.

I made it to episode three, then it all hit the fan:

You’ll notice I haven’t provided any links to the two web series I’ve mentioned here.

This is called revenge.

Chronicles Of Depression 2.0: #267: Greenspan

September 28, 2008

The evolution of Alan Greenspan:

January 30, 2008: Does Greenspan Have Alzheimer’s?

The former Fed chief put the chances of a US recession at 50 percent, but added: “We have few indications that would allow us to say we are already there.”

July 31, 2008: Chronicles Of Depression 2.0: #181

July 31 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are “nowhere near the bottom” and the resulting market turmoil isn’t showing signs of abating.

While the odds of a recession are 50-50, achieving stable markets will “take a while,” Greenspan said today in a CNBC interview.

But he did warn:

Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, are a “major accident waiting to happen,” Greenspan said. “The solution” is the “nationalization” of the companies, he said.

That happened early September to Freddie Mac and Fannie Mae.

September 14, 2008: Chronicles Of Depression 2.0: #194

Alan Greenspan also described the banking crisis as the worst of his career and possibly the worst in a century including the 1929 Wall Street crash.

‘There’s no question that this is in the process of outstripping anything I’ve seen, and it still is not resolved and it still has a way to go,’ he said.

September 26, 2008: Greenspan Calls for Action on Financial Crisis

The U.S. economy is in the grip of the most severe financial crisis since the Great Depression.

It only took him nine freaking months to catch up to me.

I would have more quotes from him, but he tended to stay quiet for months and months.

Chronicles Of Depression 2.0: #266: Buffett

September 28, 2008

Buffett warns Congress
Lawmakers face “biggest financial meltdown in American history” if they don’t act.

(New York) — Legendary investor Warren Buffett warned Congressional leaders Saturday night of “the biggest financial meltdown in American history” if they did not act to secure the financial system.

Buffett, by telephone, was consulted by lawmakers who were in marathon talks on Capitol Hill to forge a deal on the administration’s $700 billion economic bailout plan, according to two sources.

Emphasis added by me.

Hey, now the guy all of you money idolators worship has said it.

He’s singing the tune I’ve been singing for nine-plus months.

Who’s right now?

All Chronicles of Depression 2.0 posts. Your final weekend to read.

Chronicles Of Depression 2.0: #265: Flow

September 28, 2008

Credit freeze and your paycheck

NEW YORK ( — Is it even harder now for businesses to get credit from banks? No question.

Does that mean that the American economy will crumble within weeks if the government’s $700 billion bailout of Wall Street doesn’t pass? No telling.

In the wake of last week’s demise of Lehman Brothers and last-minute government bailout of American International Group, the credit markets have all but frozen. What this means for businesses is that they are having a tougher time just getting funding even for their day-to-day operations, never mind securing loans for expansion projects.

While the credit crunch is more than a year old already, two things have changed in recent weeks. First, investors have cut off a major financing source of large corporations by shying away from buying their commercial paper, or ultra short-term debt.

Also, since banks are now holding onto their money even more, they are either not extending lines of credit to companies or are instituting more onerous terms. Businesses of all sizes depend on this funding to buy supplies and inventory, make payroll and extend credit to customers while waiting for payments to come in.

Most businesses don’t keep much cash on hand. They rely on banks’ lines of credit to cover them until they get paid by their customers.

What does that mean for companies and their employees? Economists are divided, with some predicting dire consequences and others saying most can weather the financial storm for now.

Emphasis added by me.

I’ve already shown the disastrous effects of bank closings on small businesses.

We’ve been told time and again, by every politician: small business is the backbone of job creation.

If that backbone can’t get credit it requires for daily operations?

It gets broken.

Chronicles Of Depression 2.0: #264: Model T

September 28, 2008

The T this time thankfully doesn’t mean trillion! It’s the Ford Model T.

Model T: the car that shaped America turns 100

Ford’s iconic Model T was built for the common man and began to transform the American landscape soon after it first rolled out of a Detroit factory a hundred years ago this week.

This is important:

Henry Ford’s moving assembly line revolutionized manufacturing and his decision to double the wages of factory workers set a new standard that helped swell the ranks of the middle class.

Emphasis added by me.

A lesson for eBooks here:

The Model T’s low price and easy handling made it an instant winner when it hit the market on October 1, 1908. Ford temporarily halted sales in May of 1909 because every vehicle scheduled for production through July had been sold.

But Henry Ford was not satisfied: he was obsessed with finding ways to cut costs and improve productivity.

The first Model T sold for 825 dollars. By 1925, it was cost[ing] only 260 dollars.

Emphasis added by me.

The assembly line was exhausting and repetitive work that turned people into machines. Workers quit so often that Ford had to hire 963 men in 1913 in order to expand the workforce by 100, Casey wrote in ‘The Model T.”

“What they finally found worked was just pay people a whole lot more and make this new kind of work which was relentless and tiring rewarding in another way,” Casey said in a telephone interview.

In January 1914 Ford found a solution: he more than doubled the wages of plant employee, offering them a five dollar, eight hour day.

“The other auto makers realized they’d have to adopt some of these methods,” Casey said. “They also had to adopt Ford’s pay scales.”

Wages soon rose at plants across the country and Ford was able to create a new market for his automobile as unskilled laborers finally earned enough to buy them.

Emphasis added by me.

I cited the lesson of Henry Ford before.

What irony that a hundred years after his revolution, we’re on the brink of the end it all.

Maybe because we forgot the lesson he taught us. Near three decades of “luxury” items targeting a sociopathic vanity market and subsistence wages for everyone else has led to the shit we’re in.