On the Good Ship Lollipop

[Daveparts still]

On the Good Ship Lollipop
By David Glenn Cox


We are living with a school of economic thought that can best be described as the Shirley Temple school of wishful economic thinking. They trumpet the good news and ignore the bad; they shake hands and appear on TV shows pretending that it is all getting better. Housing prices were up 1%! See, they were up 1%. It’s getting better everyone; home prices were up 1%! You see, it’s getting better. I knew it would get better, and now it is! It’s finally getting better!

Except that during the same time period home foreclosures hit an all time record high. Some 42% of the homes sold last month were sold on the court house steps. They want to compare month-to-month rather than year-to-year. Home prices in Nevada are down 30% year-to-year. At the peak of the bubble in 2007, median homes prices were more than $250,000. Today the median price is below $175,000 and buyers are scarce. But month-to-month, it is looking so much better!

It is as if America is in an economic Godzilla movie. The monster tears through our economy and the Shirley Temples proclaim, “See, it’s better now! Godzilla has gone down the street!” They just ignore the damage and the refugees and pretend that all will be fine because Godzilla is destroying the neighbor's house down on the corner.

The ISM manufacturing report showed that great things are in store for us; life will just be wonderful in the very near future!

“In September, 13 of the 18 manufacturing industries reported growth. Purchasing remains a challenge as suppliers now seem to be trying to raise pricing at any sign of life in the economy."

New orders are down 4%. Production down 6.2%. Customer inventories are flat, no change from August. Prices down 1.5%. Exports down .5%. Imports up 2.5%. Well, sure it sounds bad when you look at the stark figures, but hey, 13 of the 18 manufacturing industries reported growth!

Manufacturing unemployment figures went down .2%, but it's like the first mate on the Titanic said, “Good news, Captain! The waters have stopped flooding 'B' Deck!”

“That’s great news! How did you do it?”

“Well, 'B' deck is under water, Captain; it’s moved on to 'C' deck now.”

Supplier deliveries are shown as being faster which is an inverted indicator. Domino’s will get that pizza to you much quicker when business is bad. When they can’t keep up, that means business is good. Manufacturer inventories are growing. Again, that’s not a good number; it means that their customers are afraid to add inventory. How long have supplier inventories been building? Try forty-one months!

Buried in the bottom of the report, almost as a footnote, is the following: “No commodities are reported down in price.” See the good news! Manufacturer prices are down, but commodity prices, the prices they must pay for their raw materials, are up. It’s a big bowl of vanilla ice cream in the middle of a snow storm!

“I've thrown away my toys
Even my drum and train.
I wanna make some noise
With real live aeroplanes. “

On Friday CIT Group filed for bankruptcy protection. The 101-year-old commercial lender is upside down and unable to fulfill its requirements. CIT Group is the fifth largest bankruptcy by assets in history. The largest since the Washington Mutual collapse. The Treasury Department advised, “The government probably won’t recover much, if any, of the $2.3 billion in taxpayer money that went to CIT.” The failure of CIT raises the number of bank failures to 115 this year with two months still left to go.

“On the good ship Lollipop
It's a sweet trip to a candy shop
Where bon-bons play
On the sunny beach of Peppermint Bay.”

But it's not just Uncle Sucker taking a bath, CIT owes Bank of America $7.5 billion, Bank of New York $3.2 billion, and Citi Group $2.1 billion due next year. There’s no FDIC here, boys! So lather up and be prepared to take a bath.

"See the sugar bowl do the tootsie roll
With the big bad devils food cake
If you eat too much, ooh ooh
You'll awake with a tummy ache.”

Oct. 30 (Bloomberg) -- Billionaire investor Wilber L. Ross Jr, said today the U.S. is in the beginning of a “huge crash in commercial real estate.

“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up.”

“Lemonade stands everywhere
Crackerjack bands fill the air
And there you are
Happy landing on a chocolate bar.”

Remember when the mortgage crisis first began? How advocates said we must try to help homeowners to keep their homes? They were met with a chorus from the holier than thou, “Why should the government help bail out my neighbor to keep his house when I still have to make my mortgage payment every month? That’s his tough luck!”

This is what happens. It spreads throughout the economy, and like Godzilla there’s no way to stop it except by starting at the bottom instead of at the top. To support the banks by supporting the homeowner and to stop pouring money through the sieve of the banking industry. There’s a quote from the Grapes of Wrath, “Had me a little store back in Arkansas, and when the farms went then the stores went, too.”

"A lot of damage was caused by this crisis. It's going to take some time for us to grow out of this. It could be a little choppy," Treasury Secretary Timothy Geithner said. "It could be uneven. And it's going to take a while."

A bright spot in the recovery identified by Geithner is the banking system, which he said is "dramatically more stable" because of the government bailout.

“On the good ship Lollipop
Its a night trip into bed you hop
And dream away
On the good ship Lollipop.”

[MercutioATC]

1. But..... but...... but.... Geithner says that things are getting better....

What's distressing is that so many people are willing to believe him.

[Daveparts still]

3. Do you know when Geithner

Made those claims? That the banks were "dramatically more stable" because of the government bailout. Yesterday. He knew that CIT had gone under but assumed that you didn't.

[DemReadingDU]

5. They rely on people hearing only a few buzzwords, reading just headlines

and most people really don't pay attention to the real data. But they shouldn't assume that about all people.

[MercutioATC]

6. Like the existing home sales "jump" of 6%...

Of course, they don't mention that 42% of those homes are foreclosure sales.

[natrat]

13. or that the year over year # is way negative

[truedelphi]

14. Geithner has lied to Congress on 3 separate occassions that I know of.

If you or I did that, we'd be impeached from whatever position in the government that we held.

Yet the Golden Boy doesn't have to worry about the law - he had a "get out of jail free" card for not filing his taxes, and another one on lying to Congress.

And when one Congress woman questioned him about some of the Bailout monies, he stormed at her: "Your government did not have the ability to..."

Is it not his government? Is he not an American? Or maybe, that was a Freudian slip that the Federal Reserve, that he served before becoming the kingpin of the Treasury, is not really that affiliated with us, but with those in London...

But judging by all the get out of jail free cards Mr Geithner has held, it seems to be his government far more than yours or mine!

[eridani]

16. If you have URLs for those lies, send them to Maria Cantwell

--or just post. I email her regularly, and she's one of the few in Congress who seem to be on to this jackass.

[Speck Tater]

2. K&R - Nail on the head. nt

[ShortnFiery]

4. And President Obama just proclaimed that MORE TAX CUTS are just around the corner.

Doesn't mean squat to us peasant classes, but hell, more TAX CUTS kids as we continue to WAR-ON in two Middle Eastern Countries. No worries, there's more Contractors in Afghanistan than Military. Perhaps our dollars will soon FUND a mostly PRIVATIZED military. ...

The hits just keep on coming aye? :eyes:

[Lost Jaguar]

7. Oh yeah...

...it'll be brown rice and pinto beans for quite a while. Maybe Spam once a week for a real treat.

"You know what that is, Tom? That's a ton of peaches picked for a dollar!"

[Daveparts still]

8. That Casey

"He may have been a preacher but he seen things pretty clear"

[Lost Jaguar]

9. The Film That Still Makes Me Cry...

..."Grapes of Wrath" is one of those true "classics," a word that is much abused. Folks should sit down sometime and watch a nice DVD of it on a nice TV, if they can afford such nowadays.

John Ford, the director, is often mischaracterized, because of his war and western films, as a right-winger. But in those days he hung around with lefties and was a strong FDR man. The film never fails to move me, whether in its simple poignant scenes or its righteous anger. Of the former, who can watch unmoved as Ma Joad picks through her pitiful belongings one last time before leaving home? Of the latter, who is not sympathetic as Muley squats in the dirt and explains why he considers the barren land his family's home:

"That's what makes it our'n...being born on it, and--and WORKIN' on it, and sometimes...dyin' on it. And not no piece of paper with writin' on it!"

The way he says, "workin," you can feel his barely restrained rage at being evicted after busting his ass for his whole life, dawn to dusk, as some fat cat collected the profits of his labor.

[Daveparts still]

11. That's Factory Liquor. cost me a buck

Henry Fonda’s portrayal of Tom Joad is electrifying, returning from prison he is confused. Then he becomes angry as he begins to understand and only Ma keeps him from becoming violent. He is a simmering cauldron of rage “They’re working away on our spirit trying to make us cringe and crawl” he almost growls the word crawl.

But it is John Carradine as Jim Casey that moves me. His deep-set eyes and his sense of melancholy. “I ain’t preacher no more you know, I’ll say a few words if you set out some food but a preachers gotta know. I …just don’t know anymore.”

Is this the fella that hit you?

Don’t look like him.

Oh, it was me all right, your man here, he just got smart with the wrong fella.

What did you do?

(Smiling) I talked back.

That face and those three words change the whole dynamic, the police who should be defending the people are instead their oppressor. They’re more worried about why someone hit the cop than the innocent elderly woman shot down by the police.

Boy, those forty-fives sure can make a mess

[JohnWxy]

10. Most estimates to crawl out of the REPUBLICAN DYSTOPIA (intiated by the Deregulation Disaster) are

that it won't be until mid 2011 till we get employment back to a reasonable level. We very narrowly averted the Great Depressioin II with the TARP (initiated by the Bush administration) and Obama's stimulus bill.

The good ship lollipop really was being piloted by ALan Greenspan who thought deregulation and not regulating trade in Credit Default Swaps was a practical, sensible policy. Of course the entire GOP proselytized this message too. The engines of the "good ship lollipop" were stoked by Phil Gramm who slipped the Commodities Futures MOdernization Act in as a rider to the Omnibus Spending Bill 2000 (an 11,000 page document). The CFMA could not get out of committee for 2 yrs so Gramm knew the only way to get it passed was to slip it into a large bill and hope nobody knew it was in there.

The CFMA was the law that made trading in CDSs legal and unregulated. CDSs made higher risk Mortgage Backed Securities marketable to institutional investors (they were sold CDSs by the banks and told the CDSs would pay off if the MBSs went into default. so the supposedly had NO RISK OF LOSS. -- THIS IS A GOLD PLATED EXAMPLE OF THE WELL KNOWN 'MORAL HAZARD'). This created a huge demand for high rate (read: sub-prime loans) Mortgage Backed Securities. This is what drove Predatory lenders to make loans to anybody who had a pulse. They flipped the untenable (and fraudulent) loans and were out from under the risk of these loans defaulting. This is another case of ... you guessed it..."the MORAL HAZARD".

But Alan Greenspan knew you could close your eyes and trust people to not cheat even when there was millions and even billions of dollars to be made. "Toot-toot" IT'S THE GOOD SHIP LOLLIPOP.

[Daveparts still]

12. We didn't Avert Anything

Half a million people per week are filing for unemployment, self employed trades people and independent contractors aren’t applying because they are hoping to find work. Commissioned sales people are employed but aren’t making any money. Cities, counties and states are laying workers off. Over one hundred thousand graduate from colleges, high schools and trade schools and enter the economy each month but according to the government statistics they aren’t unemployed. You must have a job first before you can be counted among the unemployed

Hundreds of thousands each month exhaust their benefits and are going God knows where. Ten million homeowners have lost their homes since 2007. That does not include renters evicted. Estimates say there are a minimum of two million homeless which is obviously low because the homeless must hide themselves to avoid being arrested or victimized. In St. Petersburg they ordered police to go into a homeless camp and cut up there tents and confiscate their belongings

http://www.youtube.com/watch?v=LABo_J3l3Ys&feature=PlayList&p=B0C989125E27BBBC&index=17&playnext=2&playnext_from=PL

The commerce department recently said that 60 % of the job losses are permanent. We didn’t avert anything! The banking bailout just changed the nature of the catastrophe instead of a sudden collapse a slow bleed. The Japanese government stepped in two weeks ago and began to prop up the dollar because the sinking dollar will take the Japanese economy down with it. They spent billions to prop it up and two weeks later it is back hovering around 89 yen to the dollar.

The decline of the dollar is not directly caused by our budget deficiet. It is a prediction of what our future looks like. There are few buyers for dollars because few see a bright future. It was no coincedense that Daimler sold off Chrysler when they did, Daimler saw no future for Chrysler in North America. Fiat bought Chrysler not to build Chryslers but to sell Fiats. Fiats built in Mexico!

[JohnWxy]

15. I just said this is the Republican Dystopia - that means it ain't heaven. I know there is

unemployment. iF we hadn't of had the TARP and stimulus we'd be looking at 20% unemployment. A great depression II.