As the nation arguably draws closer to a possible financial meltdown than at any time in the past 79 years, it may no longer be relevant to question whether or not we are actually "in a recession."
As a matter of fact, it is becoming increasingly apparent that the Federal Reserve may be running out of thumbs with which to plug the emerging holes in the dike.
And it is not necessarily encouraging that the president found it necessary to assure the public, in a televised address from the Economic Club of New York, today, that the economy will bounce back. The package of proposals unveiled yesterday by the Treasury Department, incidentally, have been described as only involving a greater degree of self-policing by the financial industry, and have been characterized by critics as being too little and too late.
Further underlining the seriousness of the situation, the president's address was followed a little later today by a televised speech from Federal Reserve Board Chairman, Ben Bernanke, discussing the credit crunch and the its origination in the orgy of sub-prime mortgage originations.
Today's crisis swirls around Bear Stearns, a leading global investment banking, securities trading and brokerage firm, in business since 1923. Alan Schwartz, president and chief executive officer of The Bear Stearns Companies Inc., said, "Bear Stearns has been the subject of a multitude of market rumors regarding our liquidity. We have tried to confront and dispel these rumors and parse fact from fiction. Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."
CNBC reported this morning that the problems resulted from a run on the firm by its customers.
As a result, the company's stock plummeted as much as 40% today and the Fed quickly enlisted the services of JPMorgan Chase & Co. to provide an emergency loan facility and presumably to execute the purchase of certain Bear Stearns assets at steep discounts.
The general situation is generating considerable controversy over whether it is proper for the Fed to bail out institutions that abused their fiduciary responsibilities and borrowers that took on excessive credit under ill advised terms. Questions are also being raised over potential favoritism on the part of the Fed, especially as pertaining to its tapping of JPMorgan Chase & Co. to take over some of Bear Stearns' assets at bargain basement prices.
CNBC reported this morning from the floor of the New York Stock Exchange that the market is already factoring in significant additional cuts by the Fed in short term rates, another unsettling sign. This might be described as something of a "catch 22" situation since such moves would also have a depressing effect on the dollar, causing oil prices to rise further.
The situation is causing a sharp rise in the level of concern. Three evenings ago, Jim Cramer, the eternal optimist who broadcasts his nightly economic pep talks on CNBC, predicted that there will be runs on the banks before there is a turnaround.
The American automobile industry, the economic core of our manufacturing sector, is also struggling. Yesterday, Dennis Virag, president of the Automotive Consulting Group in Ann Arbor, Michigan, said that "Chrysler is in a tailspin." GM lost $38.7 billion last year and Ford lost $2.7 billion.
Furthermore, the collapse of the real estate market is turning out to be increasingly more serious than previously thought. The L.A. Times reported today that Southern California home prices have fallen as much in the past year as they did during the six-year period of the last real estate bust in the nineties.
CNN said this week that foreclosure filings in February soared 60%, nationwide, over the same month last year. Over 220,000 homes got hit with foreclosure filings last month, according to the report.
Also, Reuters reported yesterday that retail sales "unexpectedly declined" last month and state unemployment rolls hit the highest level in 2 ½ years.
Clearly, there is an unusually high element of risk at this time for employees in the construction, manufacturing and retail trade industries. The U.S. Department of Labor reports that there were 37 million workers employed in those sectors in February.
Another 18 million Americans were employed in the professional and business services sector last month and the current recession is expected to have a serious impact on them as well.
Two-thirds of this nation's economic activity is depended upon the consumer and recent news, in this regard, suggests he or she is close to being on life support.
The preliminary University of Michigan consumer sentiment index for March was announced by Reuters today. Economists in the survey were reported to be expecting a final reading of 69.0, the index's lowest level in 16 years.
According to Richard Curtin, the Director of Reuters/University of Michigan Surveys of Consumers, the index has only been this low when the economy has been in a recession.
The survey indicated that more households reported financial distress last month than at anytime since the worst of the 1991 recession, and 84% thought the economy was already in decline, the highest level recorded since the recession of the early eighties.
The other gauge of consumer sentiment, the U.S. Consumer Confidence Index, maintained by The Conference Board, reveals a similar downward spiral. Off 25% in the last five months, the index was at its lowest level in fifteen years last month, excluding the Iraq invasion year.
The Conference Board declares a recession whenever there are two or more consecutive quarters with confidence levels below 100. The index has been below 100 for each of the six months ending with February. It is a virtual certainty, at this point, that when the index level for March is announced at 10:00 AM on the 25th, the Conference Board will acknowledge that its definition of a recession has been met.
There are a number of reasons for the consumers to be withdrawing into their shells. As the economic pie has grown in the United States the average worker has failed to get his or her share. While the wealthiest Americans have seen their incomes grow by over 400%, according to a recent Time Magazine article, the average inflation-adjusted income for the rest of us has actually fallen below the level that existed in 1975, 33 years ago, as reported this week by the L.A. Times.
Furthermore, unregulated globalization has wreaked havoc in the workplace causing many workers to lose their jobs, and many more to have to accept a lower level of employment.
In the process, corporate loyalty to employees has, in most cases, gone by the wayside. Some companies are conducting long term layoff programs which means that their employees sweat out each payday, hoping that the dreaded pink slip isn't included with their next paycheck.
The consumer is also under attack by higher prices, particularly in the supermarket and at the gas pump.
But perhaps the biggest blow to the confidence of consumers has come with the gradual realization that their money trees, the sources of the funds they used over the past few years to buy all those toys - the boats and the off road vehicles, as well as new furniture and great vacations - have dried up like shrubs in the Arabian desert. The end of the real estate honeymoon has come to pass. Suddenly, home values, which resulted in generating a considerable influx of monies for the economy, have not only ceased to rise but are now, in many cases, threatening to fall below the level of the over-inflated liens.
And, of course, many who took on new loans in recent years are experiencing built-in increases in their mortgage payments that they cannot afford.
Is it any wonder, then, that the consumer is finally running for cover?
And, the discouraging aspect, according to analysts on the business channels, is that there doesn't appear to be a light at the end of the tunnel.
I know that this article will generate the usual accusations of fear mongering, but it is important, especially at a time when the mainstream media is not being particularly forthcoming, to draw attention to the seriousness of our present situation.
I originally predicted this economic turndown on January 31, 2006 in an article that is still posted here on Gather. I repeated the warning in several subsequent Gather articles, all of which generated the fear-mongering comments.
For those who can, I now suggest that it may be an appropriate time to increase the amount of funds you have on hand at home. A crisis in confidence is the most serious condition that our economy can face, and it should not be taken lightly.
The opposite of "confidence" is "panic." Panic occurs with the realization that the money you have on deposit is not there, that the groceries you depend upon are drying up or the gasoline you need for traveling to and from work is running out.
Let me be perfectly clear. Beyond the Bear Stearns situation, there is little indication of panic on the part of the public, as yet. However, the economy is clearly experiencing a crisis in confidence.
Therefore, it would not be imprudent to take appropriate measures so that you, personally, can survive a panic, as remote as the chances for one may now seem to be.
Dave McGill, News Correspondent
Dave's column, "The Contrarian," generally published every Wednesday, to Gather Essentials: News will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day, and will occasionally also appear on other days of the week
Dave has been a senior officer of a large eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development
You can find all of Dave's "The Contrarian" columns at: http://gather.com/thecontrarian...... Keep up with Dave's other postings and Gather activity by joining his Gather network - just click here: http://atadaskew.gather.com........ You'll find Dave and other News Correspondents, plus celebrity content and plenty of other News experts at News.gather.com.
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Comments: 122
I'm sick of thinking about that idiot, let alone hearing him try to put together an intelligent sentence. We can expect no help from that quarter. They are going to give cheap money to financial institutions to buy up abandoned and foreclosed homes. Yup, and then those companies will make a fortune reselling to other over-eager buyers. Meanwhile those who were cheated and lied to in the recent round of such dealings are just out in the street, can't even take bankruptcy thanks to Republican sponsored laws against that.
When Bush said this 4 years would begin the Ownership Society, we had no idea he meant that the rich would end up OWNING the rest of us. Why doesn't anyone ever throw his prophetic words back in his face???? Where is Fox News ranting about what he said compared to what happening??? CNN and NSNBC???? Only columnists still speak truth to power. God help us all.
The Country is going crazy, yet people are still having kids left & right? We're at war, but only a small fraction of those kids could tell you where Iraq is? We had better galvanize democratically damned-soon, or we'll become a police State. The only jobs will be in the military.
As a result, we have Medicare (broke), Social Security (going broke), public housing (being demolished), etc., etc. Fortunately, the American people have always been smart enough not to trust the economy to the government, and let's hope that wisdom continues.
Risking our economy in the pursuit of political power is not a winning strategy!
The "consumer" here is obviously and primarily the middle class which has taken it on the chin, courtesy of the so-called upper class and its control of our political process which has all been made possible through the courtesy of our insidious system called campaign finance.
The higher real estate taxes, the higher insurance premiums and, I'm sure, the exhorbitant Alternative Minimum Tax are just a few of the ways that your wealth and that of the middle class has been eroded, kevin, while enormous tax benefits and a favorable regulatory climate, among many other things, have elevated the wealthy to unprecedented heights.
It continues to amaze me that the moneyed interests are still able to enlist the support of so many members of the middle class.
Good article! "Take appropriate measures" is excellent advice but unfortunately, for the vast majority of Americans, There are not measures they can take. They live, with luck, from paycheck to paycheck and don't have a portfolio of investments to shield or other similar situations. They will suffer with the inflated prices and for many, being laid off or reduced pay or hours.
It is ironic that this year's Social Security increase of 2.3% fails to account for significant increases in health care and transportation costs. Some other COLAs from other pension plans were even lower.
This is not a recession we're heading toward, it is the Great Crash of 2009 and the Great Depression of 2010 - 2020.
Are you guys ready? Buy wool, denim and leather. Learn to darn and make soup from bones. Downsize to a small apartment and work 3 to 5 jobs.
If you don't remember your parents' stories about the Great Depression of the 30s, well, read about it. And budget. Get used to it.
I really think that by the end of the year the stock market will be higher and better off. That said, whether this is enough to inspire more than some show legislation or change anything is anyone's guess. Most Americans do not know enough or listen enough to know what to support.
Jees-sus ... we do not even have an official recession at this point, and unemployment is not bad. Prices are rising because we are being extorted by the Arabs ... an act of war. Wait until Cheney gets back from his Saudi Arabian trip and see if things to do become clearer ... either cheaper gas or the gloves come off.
However, JP Morgan Chase now will have access to Bears books and may just buy Bear, however, that's just speculation.
This was somewhat of a run on the investment bank Bear Stearns, however, it was more like no one wants to do investment banking with them as folks take their investments elsewhere.
It would be also good to not forget that I sold a home in Whittier in 1993 for 165,000, which I saw on the market in 2006 for 750,000. Why so hi? It was just a three bedroom house on a 55X 115 lot.
How did those prices rise so high? The house now isn't worth that at all I would assume.
The home prices have fallen throughout the US and the home isn't worth what it was when the people bought it. Therefore why did they buy at such a high price? Why did a bank gige a second loan that was also more than the house was worth.
The 21st century is NOT America's century; it is Europe's and CHINA's century.
The sun set on the British Empire with WWI and the sun shined on the US at that point, hampered only by the crash, depression and WWII.
WWII was the true beginning of the emergence of US power. Europe's factories and economy were in a shambles; Asia was still very much a third-world nation, as was much of the rest of the world.
The US had no physical destruction from WWII and enjoyed a boom not seen in the US ever. The dollar rose and rose, with various bumps. The Canadian dollar was higher then the US dollar in 1968 but by 1975 the Canadian dollar was 75 cents, then 62 cents for decades until the last year or so.
The rise of the EU in the 90s brought what people expected - a stronger Europe to compete with North America. We would have had much worse strats in the 90s had it not been for Robert Reisch's engineering of NAFTA.
Asia, still a developing area but not really a third-world country in the old definition, is on the rise, and with it, more people will be speaking English than ever before. This is good in some ways but very bad for outsourcing from US based companies, vis a vis American employees.
The trends from the last 15 years of increased competition from Europe and Asia and increased outsourcing from American companies will continue.
America needs SAFTA and needs it now. Without SAFTA, the US is a tiny NAFTA competiing with sizable EU and a very strong EU economy and a huge developing Asia.
With NAFTA and SAFTA, the import-export trade markets will be huge and that will help keep the US in a liquid market.
We have NEVER in the last 50 years, had to compete with a strong HUGE currency and economy before. Now we have to. And nobody is really prepared for it, even though this is old news, a threat for the last 30 and especially the last 15 years. But we continued to borrow on credit and margin.
Schools have been teaching the Second Great Depression parallels for a while now.
Get used to it. The next 50 years in the US will be a lot tougher than the previous 50. The slide began in the 70s.
Kathryn, of course we are.
Asia has lower labor costs.
Whoopee, if they cannot sell their stuff they have nothing.
I am all for global trade.
Some global players are being unreasonable, energy exporters.
The EU is very strong, their combined economy is larger than ours
and their population 150 million more than ours.
I see no problem with that, these problems will work out because
it is in everyone's interest. Gloom and doom aside the US is much
richer than we were, most of what you hear is whining from people
who were stupid and added a big spike to home prices not knowing
what they were doing.
Thank God I have worked all my life to have less needs rather than more toys.
I am so grateful that my life is simple with few material needs and low expenses that go well with my ultra low income. I always wanted to be where I am now in sunny California with a tiny place with low rent. I don't have a car or credit cards and I was once the Credit Card Person who did not know what to do with cash. I bought candy bars with credit cards when I had to go to expensive stores because cheap stores did not use credit. Thank God I finally got here. I write every day and almost all my books are getting published. Even though my income is smaller than it was before I became a successful writer, I am the happiest person in the world. Love Maryanne
That is my one concern about Obama...is he another Bush Optomistic Believer only in a different coat...his "we can" and "hope" and "New Direction" makes me a little quizzy..
I listened to our fearless leader Mr. Bush tell his audience today that yes...he thinks "things are tough" and in the next breath he says he just dosen't agree with all the other economists who are talking recession...that is one of the biggest insults he can hand out to others who study economy and teach what makes our economy work...he is setting himself up above some serious teachers ... that has always been his mistake...he DOSENT LISTEN...and it HIS WAY OR THE HIGHWAY.....
so Bruce...after the announcement comes out in March..."The Conference Board declares a recession whenever there are two or more consecutive quarters with confidence levels below 100. The index has been below 100 for each of the six months ending with February. It is a virtual certainty, at this point, that when the index level for March is announced at 10:00 AM on the 25th, the Conference Board will acknowledge that its definition of a recession has been met." and the index is below a 100 will you finally at least acknowledge it is correct...or will you agree with Mr. Bush these are just tough times?
I wonder what Mr. Bush would say to this statement - being he dose not have to worry about his job or future income or home mortgage...
"There are a number of reasons for the consumers to be withdrawing into their shells. As the economic pie has grown in the United States the average worker has failed to get his or her share. While the wealthiest Americans have seen their incomes grow by over 400%, according to a recent Time Magazine article, the average inflation-adjusted income for the rest of us has actually fallen below the level that existed in 1975, 33 years ago, as reported this week by the L.A. Times."
It concerns UBS (previously Union Bank of Switzerland), one of the largest global financial management firms founded in 1850. It's described as the world's largest manager of other people's money and the second largest bank in Europe with 2006 net income of $11 billion.
Headquartered in Switzerland, it does 30% of its business in Europe and 30% in the U.S. It is designed for high net worth and affluent individuals according to its web site.
Since daybreak today, its common stock price has dropped 14% including nearly 6% in after hours trading.
The breaking news alert reports that the firm is seeking to sell its Wealth Management Division to raise much needed cash.
Wealth Management is one of four divisions in the bank and the one that is generally mentioned first in its press releases.
In further news, Martin Feldstein told a conference in Florida today he thinks the economy is now in a recession which could be the worst since WW II. He placed emphasis on the word "could." Feldstein is a Harvard economist and is president of the National Bureau of Economic Research.
He is the first member of the NBER to acknowledge that we are in a recession.
The Fed can't bail itself out. There seems to be an "abuse of fiduciary responsibility" there, too.
George Bush has had his head up his butt about what's going on in our own back yard for the past 7+ years. Why should today be any different?
The falling financial institutions in this country and around the globe, houses that have been considered solid and able to weather any storm, is another example that war does not a strong economy make.
I have my 3 month survival kit at the ready.
Comprehensive view of current wess. If the Fed lacks the means to do what it takes, the government can come up with something (as when FDR was elected) and this will very hard to explain to the people because its going to take a lot of cooperation from other nations -and at a price - and not just seeking wealthy foreign groups inventment. Madeline Albright likes to say our role as a world leader is necessary to others. Our attitude to our role is going to have get serious and coherent and make sense to the people. Congress and the Administration have not been responsible or effective for years.
We listen to McCain assure us that reducing government regulation will fix the mortgage crisis. That is absolutely ridiculous and I would like anyone to explain the logic behind that!
As you said so intelligently before, why do the middle class of this country support policies that only befit the moneyed class? It's a stupidity crisis!
Look for three or four more of these investment banking issues. JP Morgan may or may not buy Bear but Bear's gone, UBS and Lehman Bros are on the same track. The last time this type of financial stress happened over 1,000 banks went south or were bought. Many tho were small and therefore, forgetful.
Talk's cheap Mary Ann
It is a shame really, for America was a truly great country and the best choice available to the world for a dominant power.
Now your country is declining in status globally, spinning out of control economically, defated by inferior powers in war and a spent force in the world.
In a generation American children will not understand their parents wistful and nostalgic remarks about the good old days when American was "the leader of the free world".
On the plus side, the shrinking economy will slow the illegal immigration flow far better than any government action ever did.
The Economic Growth and Tax Relief Reconciliation Act of 2001 were signed by President George W. Bush which was estimated to save taxpayers $1.3 trillion over the period of ten years. It also brought down the new lowest rate to 10% and increased the child tax credit to $1000. It also cut the tax rates from 28% to 25%; 31% to 28%; 36% to 33% and 39.6% to 35%.
The Jobs and Growth Tax Relief and Reconciliation Act of 2003 further speeded up the tax rate cuts that had been enacted in 2001. The congress passed a series of tax breaks like option for individuals to deduct the payment of whichever state taxes were higher, sales or income tax.
That bill helped Everybody, Thanks to the efforts of Ron Paul the provision to tax part of Social Security in the tax bill was eliminated as well.
Folks like GW Bush and much of his cabinet are but "tools" of these folks that have the wealth to hide themselves in the shadows of subterfuge akin to the real control of the multi-national corporate realm through interlocking directorships and the like ...
It is "they" who have co-opted the democratic process of this nation, designed to have the two political parties work in cooperation for synergistic results, now completely polarized and controlled by PAC money from those same "shadow" controllers who now will soon have us where they want us, a place where we will "demand" something, anything, to improve our lot.
Those same "folks" that created the European Union so stealthily, are now ready to implement their long term plans of creating the counterpart to the EU, the NAU (North American Union) ... Canada, US of A, and Mexico ... (most likely to eventually include the southern hemisphere also, way down the road of time)
For those with inquiring minds, the evidence already exists all over the Internet, yet for most who still want to trust their government and associated "leaders" who use secrecy to effect their goals, all you will get is denial ...
You can be sure that the most powerful think tanks have been working on these plans for a very long time and they have things well figured out with various contingency plans ready to be activated to save their day should another plan not work out ...
One of the problems they are currently addressing to make that work, is the problem of parity between the dollar and the peso down south, prior to making the combined AMERO (the common currency of the NAU) "workable" according to "their" plans ...
We aint seen nothin yet folks ... IMnsHO.
The data compares the impact of the Bush tax cuts on the top 1% of earners with the impact on the bottom 40%, through the year 2010.
Thus, if kept in place, the cuts will produce:
- an aggregate benefit of $130 billion for the bottom 40%, versus an aggregate benefit of $719 billion for the top 1%.
- The bottom 40% will receive 6.1% of the total cuts. The top 1% will receive 33.3% of the total cuts.
- The bottom 40% will receive an average aggregate benefit of $2,300. The average benefit for the top 1% will be $522,000.
- And finally, the tax cuts as a percentage of income, will be 1.2% for the bottom 40% versus 3.9% for the top 1%.
Comparing the bottom 40% with the top 1% is a standard measure for assessing the so-called income gap.
Obviously, the top 1% have been paid back, and continue to be paid back, for providing our politicians with much of their campaign finance funds...
No wonder the country wants to dump people who think like this. No wonder no one wants to pay or invest in people who think like this. No wonder taxpayers resent having to shell out money for ornery complaining never-listening whiner people who are on an eternal bummer.
Life and survival is a competition, and often rough and deadly. Obviously lots of people's lives here are way to easy, so easy that they live in an imaginary world of fantasy threats and continually shout that the sky is falling.
Yeah, we have a few problems, when did we not?
As a general rule, however, this might be a good time to think of diversifying into investments considered to be "safe havens," but this is by no means to be considered as investment advice.
The key is energy, and we are over the proverbial barrel and we may end up in a major flareup of the war on terror which is really partly an economic war on the West by energy producers.
However, I believe this is an unusually risky phase that the country has entered into. I've seen perhaps ten or a dozen recessions come and go, as an avid fan of economic conditions, and I have not seen so many negative trends impacting at the same time as there are now.
It doesn't mean that there will necessarily be a collapse. It does suggest, however that the risk level is high, and the ability of the system to digest negative news in an orderly fashion may be getting somewhat strained.
I also wanted to respond to Ron's earlier comment that this critical economic situation is part of an overall plan to basically subjugate the American worker in much the same way that globalization has.
In that respect, it's my opinion that every recession is planned and has been, going back to WW II. The Fed has the ability to do this and has regularly done so in response to the economy becoming overheated with strong inflationary pressures, and - despite the temporary pain felt by many recession victims - the practice seems to have at least succeeded in avoiding another Great Depression, so far.
This economic cycle has a markedly different profile, however. The Fed started tightening the screws on economic growth over two years ago, at which time the economy was not overheated and there was no discernable threat from inflation. That type of situation has never before occured and it caused some to believe that the result - looking down the road over the 24 months or so that it generally takes the Fed's actions to be felt - might be a larger than average recession.
Now, why the Fed did that could fit into your theory, Ron, or it could be that the Fed foresaw future inflationary pressures such as the surging demand for commodities and the huge federal deficits and decided to act preemptively.
In any event, it could be argued that the Fed was in a no-win situation and that there would be extraordinary consequences to whatever policy it pursued. In other words, the die was already cast and global economic conditions were headed for trouble no matter what.
In any event, these are unique economic times...
If the American worker wants to keep a place in this world, they should be demanding that the media become a distributor or education and that all education should be free and people should be paid for going to to school.
Much easier to whine and moan.
People still do not realize that it costs Saudi Arabia $1.50 to suck a barrel of oil out of the ground, and that if they want to they can knock the price of oil right back down to what we were paying 3 years ago. You think the Iraq war has been a waste, wait until you see a huge brand new energy infrastructure that is obsolete before it even gets turned on and what that misdirection of investment would do for our economy.
This is the most likely scenario for control of the country I can imagine. The problem is, what we have has more or less worked, if you remove the hysteria and fear generated by it ... what will we get if we replaced it with some kind of revolution.
You want to put Ron in charge of the economy? Of maybe Jerry K?
Bruce: Downsizing is not always a good idea. Downsizing when it is necessary can be a good idea. Downsizing just to show a one-quarter blip on your bottom line is just plain stupid. Downsizing should be a last resort after everything else has been tried.
Bernard: I laugh every time I hear that silly charge about liberals or Democrats being the party of big government then seeing the figures on the size of the government since Mr. Bush took office. Under Mr. Bush, a Republican I'm sure, the size of government has exploded. Just last month the job market would have been a decrease rather than a small increase without a huge number of government jobs. They never stop to explain why, if Republicans are running things, government continues to expand.
Colonel George: The Bush tax cut benefited the top one tenth of one percent of tax payers the most. Much smaller amounts went to regular working people. The last estimate I saw said that the top 1% of earners got over 50% of the cuts. The huge increase in jobs never happened. The national debt and the deficit soared into the stratosphere. By the way, just for the record, virtually nobody says that the Bush cuts helped ONLY the rich. Most of us simply tell the truth....they were weighted to help those who need it the least the most.
Bruce: I do agree with you that education is the key and that here we cut our own throats with our sink or swim mentality when it comes to training and/or retraining.
Without the Fed injections, borrowed and added to the national debt, we would be in a wholesale market crash. And the injections are only buying time until some hoped for miracle. Can't go on forever.
This is an engineered crisis, though I believe the puppet masters have overplayed their hands to consequences unforseen. Unless monetary policy is wrested from the ideologically blinded American executive branch we will continue this slide. When the Repubs are ejected we will see draconian measures of taxes, oil policy reform, exit from the hemmorage of Iraq, reclaimation of windfall profits and all those socialist actions so hated and made so inevitable by conservative politics and policy.
The problem with you is that you have this narrow conservative view that all is well as long as the economy treats "you" good ... that and the fear that the Muslims are after you.
You refuse to look past your own confining box you call reality and if anyone suggests there is something else to consider, you try and shoot the messenger ... simple as that.
More than a few oil industry insiders have pointed out that there is a very good chance the Saudis have been lying about their reserves, as have many others, by comparing their estimated starting fields to what they have already produced, over the years, and that they are past peak. If that is true, then they would be committing fiscal suicide to come to our aid, and there is no indication they have any desire to, anyway. We will continue to be a victim of the whims of foreign forces, and our own rapacious oil industry till we find a replacement for this energy source, that is also poisoning our planet.
Whatever that is supposed to mean Kevin.
Ron, Saudi oil reserves are a state secret in Saudi Arabia. Saudi investment in the US is a US state secret.
Go around and look at oil reserves. There is tons of oil, even considering China and India. Global warming is not going to be stopped, or dealth with realistically for many years maybe decades. Right now oil keeps all of us employed and alive. Right now not enough oil will destroy the western world. Bottom line is that we and Europe need to secure that resource whatever.
Yes, but we know the projected Saudi production when we developed their wells (western world) and we know the figures on how much they have already pumped and sold. It's no wonder why they would be secret, though. As for investment, I just know who's been bankrolling the Bush family for generations. There are not "Tons" of easily pumped, sweet crude oil. There are tons of putrid, expensive to have to refine oil, and there are tons of squeeze it out of shale, or sand, or use expensive pumping methods, oil. That is why we are in Iraq. If you're going to have to use the many methods they have to to get to that "Tons" of oil, it's going to be extremely expensive. A lot higher than the 1.50 you mentioned above. Actually, that's what the articles I said indicated the Saudis would be up against soon.
"Go around and look at oil reserves. There is tons of oil, even considering China and India. Global warming is not going to be stopped, or dealth with realistically for many years maybe decades. Right now oil keeps all of us employed and alive. Right now not enough oil will destroy the western world. Bottom line is that we and Europe need to secure that resource whatever."
Near as I remember saying, GW Bush is already doing a fine job of destroying our little niche of the western world for us, and the oil companies feeding upon us like carrion are already killing our economy, what little George left for them. I don't see any down side to trying to trow this yoke off, just as quickly as possible. I do see a danger in you all that oppose alternative energy. We better get Global warming under some kind of control in less than the decades you speak of, because it is already at a tipping point. Once you go so far, Mother nature doesn't heed calls to turn around on a dime. I am confident when we get some new broom sweeping done, we will see better gains, on that, and a ton of other things.