Day: April 23, 2009

Ron Paul On Bailouts

Ron Paul was question on CNN about the bank bailouts and he had some interesting responses:

“If a gangster steals money and he’s successful, you don’t celebrate. Yeah they might be. This is just going to make the people angrier. They ripped us off, took all of this money, and now they’re making bundles? It’s just an unfair system to penalize average people, inflate the currency and bring on another crisis and undermine the whole system.

So I would say a bank’s success here and there is not necessarily something to celebrate. It’s still pretty early. I don’t think we’re out of the woods yet to celebrate banks’ successes. What we have to realize is a lot of people stashed away a lot of money and took care of their bonuses and what not. You’re not going to erase the anger that’s come from that just because the bank made a profit. Like I say, it might make things worse.”

Paul has his rabid supporters and maybe they should go after the leadership of the GOP….at least they have some pretty solid ideas, even if I do not agree wioth them, they are ideas.   A lot more than the present leadership can say.

Is There A Light On Or Not?

The global economy is expected to lurch into reverse this year for the first time since World War II with appalling consequences for nations large and small — trillions of dollars in lost business, millions of people thrust into hunger and homelessness and crime on the rise.

And the pain won’t stop this year, the International Monetary Fund declared Wednesday, for what it said was “by far the deepest global recesssion since the Great Depression.” To cushion the blow and head off further damage next year, the IMF is calling for more stimulus projects from the word’s governments, including major spending for public works projects.

Okay, Obama and Geithner are saying there is a light at the end of the tunnel…..that they see signs of the recession beginning to recover and yet the IMF does not see tha same light.

U.S. Treasury Secretary Timothy Geithner struck an upbeat tone on the global economy in a speech Wednesday, saying he’s already starting to see “some signs of stabilization of declines in output and trade.”

While the world economy is going through “the most severe crisis in generations,” recent actions taken by the Group of 20 leading nations during a recent London summit should make way for a sustainable recovery, said Geithner.

GM has announced that he will close most of its US operations for 9 weeks this summer, that alone will push the recession into a deeper hole.  Workers will have little cash to buy trhe goods that are not being made.

So why the difference in opinions?  Is the IMF right or is it Geithner?   Optimism is a wonderful thing, but is it false optimism or is there truly a light on in the tunnel?  None of the indicators I look at show any promise for the next 6 months….but then I did not win a Nobel Prize for economics…..I work.

Things Are Not As Bad As They Seem

Are things at Freddie Mac that bad?

David Kellermann was recently promoted to the chief finanacial officer of Freddie Mac.  Mr. Kellermann, 41, began working nonstop, sometimes returning home only to change clothes, colleagues say. He was losing weight and telling friends that it seemed impossible to appease everyone — regulators, lawmakers, investors and other executives — given their competing demands. Someone was always angry with him, he told one friend. And no matter how many hours everyone worked, it seemed as if the economy and homeowners were still slipping farther into the abyss.

Early on Wednesday, Mr. Kellermann went to the basement of his brick home and hanged himself, according to people familiar with the situation who were not authorized to speak. His body was removed five hours later, through a throng of neighbors, television crews and others.

The roots and causes of suicide are often unclear. It is not known if Mr. Kellermann succumbed to the pressures of his job. But in the aftermath of his death, it is plain that at Freddie Mac, as at many of the companies in the center of this economic storm, there are forces so strong they can overwhelm almost anyone.

I have the feeling that when this crisis is over, there will most likely be even more such stories.