Nothing's Changed

The Big Boys rule.

"The biggest hypocrites in the world are the United States Congress because they set out this philosophy that too-big-to-fail is something they don't believe in and they want to stop it and then they write a bunch of laws that kill the small banks and help the big banks get bigger." Richard Bove, Rochdale Securities

And then there's this, "Bank of America is two companies. It's everything Countrywide [Financial] and everything that's not Countrywide. Everything that's Countrywide is rotten to the core. Everything that's not Countrywide is doing quite well."

Watch it here.

Ripples

For want of a nail, the shoe was lost;
For want of the shoe, the horse was lost;
For want of the horse, the rider was lost;
For want of the rider, the battle was lost;
For want of the battle, the kingdom was lost,
And all for the want of a horseshoe nail.

Gotta love Mother Goose. Timeless. Here's a modern day version to ponder:

Blabber Mouth Barney and Congressional Cohorts attack some TARP-receiving corporation for having a corporate retreat at a fancy resort.
The Acme Widget Company board fears bad publicity, stockholder backlash, and Congressional subpoenas.
Said board cancels its Gold Legion Sales Award program in Las Vegas.
Vegas hotel vacancy rates skyrocket.
Vegas hotels lay off workers.
Laid off Vegas workers quit making house payments.
Banks foreclose on laid off Vegas workers.
Banks now own lots of Vegas real estate.
Banks have to take TARP funds.
Blabber Mouth Barney gets to tell banks what to do.

The winner? Blabber Mouth Barney gets his mug on TV, gets more votes, and gets more power to tell banks what they can and cannot do, what they can and cannot pay their employees, and--just around the corner, it's coming--who they have to lend to.

The losers? The taxpayers. The taxpayers' grandchildren. Everyone else in the chain.

Count me in . . .

With this 44%:

Forty-four percent (44%) voters also think a group of people selected at random from the phone book would do a better job addressing the nation’s problems than the current Congress.

That, according to Rasmussen. Only 37% disagreed.

Put another way, only 37% of voters agreed that these Bozos are doing a better job than would folks picked randomly from the phone book.

Very amusing. Someone at Rasmussen has a good sense of humor.

Scared People Don't Buy

Back from a couple days with one of those "intestinal" things. . . .

Not generally a fan of Donny Deutsch--one of those pretty-boy, New York, Frank Gifford-types--but he sure did hit it on the head today in an appearance on CNBC.

The talking heads were arguing about whether the "stimulus" package will stimulate and bring us out of this mess. Argues Donny, "Scared people don't buy cars. Scared people don't buy houses. People are scared." Those are pretty close to the exact words. I would add that scared people don't even go to the mall, let alone buy anything there. They don't go to Disney or buy lattes at Starbucks. They wait an extra week or two before getting a haircut and, unfotunately, may not be as charitable.

And there's no doubt, folks are scared these days.

I agree with Donny that the government can posture and primp and spend all they want, but until Joe Sixpack has stopped being scared, he's never going to buy a new truck.

So my prediction? This "stimulus" bill will have no effect. (Did Pres. Bush's package last spring bring us out if this?)

Prob. is that this "stimulus" bill is only $790 bil. in a GDP that in 2008 was $14.58 tril. Of course GDP won't be that high this year. Even so, the most of the money in this bill will not be spent this year either.

Think of it this way. $790 bil/$14.58 tril=5.4%. What's happening is Congress is borrowing 5.4% of what we all produced last year in order to give it back to us. So we're all going to get, collectively, a 5.4% "raise".

If you got a 5.4% raise starting tomorrow (and remember, it would really only be a 2-3% raise in '09 bc of the back-loaded nature of the package), what would you do with it--assuming that Donny is right and the you are as scared as the rest of us are these days? Buy a new GM car? Eat out a couple extra nights each month at Ruth's Chris? Or save it, pay down debt, or chuck it into the 529?

There's no way that even those Bozos on Capitol Hill can make up for a consumer frozen by fear. We got burned when the dot.com bubble burst. Then the real estate bubble burst. Then the banking system collapsed.

Spending a bunch of money and calling it "stimulus" may get you re-elected in some parts of the country, but it's not going to get us to buy new cars again. Or RVs made in Elkhart, Indiana.

Turn Out the Lights. . .

the party's over. You know that all good things must end. Call it a night, the party's over. . . .

Tax Big Food?

The Carpe Diem blog has a great graph of the profits of Big Oil v. the profits of Big Food. From '05 to '07, profits for Exxon Mobil are up 12% while profits for Monsanto are up 289% and for ADM up 107%.

So why are Congress and the press on Big Oil's back but not Big Food's?

Politics.

Focus groups hate Big Oil but have never heard of Big Food. There are more farm states than oil states, more farm states represented by Dems, Dems control Congress and can demagogue the issue. For Presidential candidates (except McC), the Iowa caucus rules out any attacks on Big Ag. and, therefore, Big Food. The environmentalists hate Big Oil. They run the Dem Party, which controls Congress and can demagogue the issue. Folks who don't do the grocery shopping have no idea how bad food inflation has been. But those who don't do the grocery shopping do buy gas every other day.

Commie in Congress

Communist Maxine Waters, Democrat from L.A., she of the the-Rodney-King-riots-were-"a rebellion"-not-riots fame, wants to nationalize Big Oil if it won't guarantee a decrease in oil prices in exchange for the right to drill.

That's great, just great. Government will do as well with oil as it has with Katrina, the DMV, and the Veterans' Administration. This says it all.

Tell Us How Your Really Feel

Dow Chemical announced today that it will be increasing the price of all of its products due to increased energy costs.

CEO Andrew Liveris knows how to tell it like it is. Typical Aussie. In an interview last week he called Congress "a joke" for prohibiting offshore drilling. "To me that is the insane asylum being run by lunatics."

I'm trying to find the full text of his statement today, but in the meantime, here's a blurb from Yahoo:

"For years, Washington has failed to address the issue of rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm to America's manufacturing sector and all consumers of energy," Chairman and Chief Executive Andrew Liveris said in a statement.

"The government's failure to develop a comprehensive energy policy is causing U.S. industry to lose ground when it comes to global competitiveness, and our own domestic markets are now starting to see demand destruction throughout the U.S."

Sounds like he's going to be sending production overseas.

Sounds like he's predicting recession.