Finally, he [Brutus] spoke to Volumnius himself in Greek, reminding him of their student life, and begged him to grasp his sword with him and help him drive home the blow. And when Volumnius refused, and the rest likewise ... grasping with both hands the hilt of his naked sword, he fell upon it and died.
Heck, I'll hold the sword.
As the housing bubble inital shock blast passes we find ourselves in a classic recession (with the heat blast and debris blast still coming). In one of those employment and consumer spending drives GDP and recovery. The JPMorgan scenario puts the worst case unemployment figure at 8.0%. Sorry, that's just wholly unrealistic. CA is already at 7.7%. We'll be ucky to escape an honest 10% nationally and 12% California. Only 12% because our population is so mobile. Expect a population decrease. This is another of my wacky predictions that 6 months from now everyone will say is obvious.
On the plus side; I've a feeling manufacturing capacity hardware in the US will be a lot more attractive in the very near future between targeted stimuli and dollar weakness. Even if that means boxing it up and sending it to Chindia. [p.s. I live about 5 miles from Haas Automation.]
All I'm saying is enough of the Bush bashing. Of course he doesn't know what he's doing. NONE of them do. We tested the limits of financial engineering to the breaking point. Guess what? It broke. This is all new territory and the only people with half a brain who have given this scenario any thought are blogging.
Given the current terms of the bailout I think there is a serious new hazard being created. Yeah, just what we need, new hazards. Every deal has been progressively less generous than the preceding deal. There might be a rush for the exits before the terms get even worse. Banks might start lining up at the confessional talking down their position rather than risk being late to the window. Some points on the bailout bill:
• The servant of multiple masters serves none.
• The profits go to debt except those that go to subsidized housing.
• "Establishes strong oversight board with cease and desist authority" and "Establishes an independent Inspector General to monitor the use of the Treasury Secretary’s authority."
• "Maximize and coordinate efforts to modify mortgages for homeowners at risk of foreclosure." Seeing what mischief has been promulgated within the commerce clause imagine what this loophole will spawn. It doen't even limit this to mortgages that the Treasury buys fergawdsake.
They won't even tell us who ordered or why they must pass by Sunday. The two things that stick out are the need for a recess to campaign and the opening of the Asian markets. What's the hurry? We don't even have single digit accountability. $100b for x, $200b for y. How tough can it be to get it right to the nearest one hundred billion dollars? No deal.
Mission creep; And still no major HB bankruptcies? Banks are one thing but when these guys go tango uniform unemployment will skyrocket. You think $2500 per person is expensive? Wait until underfunded unemployment funds are recapitalized at the state level. Scuttlebutt is that the HBs are trying to get in on the deal. The automakers already got their raw meat. Remember when $25 billion was worth mentioning?
I'm not afraid of a much needed recession. I am very afraid of the efforts to prevent it.