Four Horsemen? - Brooklynian

Four Horsemen?

Lehman's gonna go. If Merril is next are we on our way back to a "Ford to City: Drop Dead" era?

And if so, is that necesarily a bad thing? Sorry have to slay that sacred cow, but when regular folks already can't afford to keep a roof over their heads maybe some severe short term pain is in order to bring rent/mortages and the cost of living back in line with real wages?

Maybe not?

New York city has been spared the economic turmoil engulfing the rest of the nation but conventional wisdom says it fall last and recovers last.

Also, does anyone else think the fundamental problem is our failure a s a nation to replace secure, high paying factory jobs with anything? How can you be middle class in this country anymore?

Finally, is that enough questions for one post?

Comments

  • manufacturing jobs gone the way of dinosaurs, and kids graduating dumber than doornails unable to fill the hightech jobs that are available. We are in deep doo-doo.
  • Guvna wrote: manufacturing jobs gone the way of dinosaurs, and kids graduating dumber than doornails unable to fill the hightech jobs that are available. We are in deep doo-doo.
    And high tech jobs also going to the weastern hemisphere, with no corresponding mitigation with new upper middle class or even middle class job creation.

    We are Effed.
  • NOT one reporter asking people on the street what is happening on Wall Street. How it's going to impact them. The only thing being talked about is the "Lipstick" issue. No one cares.

    Guess we'll have our bibles, guns and know how to field dress a moose to survive into the next century.

    We are F*cked as a country.

    :cry:
  • I have been warning people about this for months now. It is only going to get worse. MUCH MUCH worse.

    Enjoy life now while you can. In a matter of weeks the siht will have coated the fan. Loose, drippy, stink, siht. All over the place.

    Obama, McCaine, two faces on the same body. Sheeple better wake tfu.
  • I have a friend at Lehman's (though maybe not anymore, I should really call...) and his prediction was we have at least another year like this - with financial crisis, etc. until things bottom out before they get better.
  • mantic wrote: I have been warning people about this for months now. It is only going to get worse. MUCH MUCH worse.

    Enjoy life now while you can. In a matter of weeks the siht will have coated the fan. Loose, drippy, stink, siht. All over the place.

    Obama, McCaine, two faces on the same body. Sheeple better wake tfu.
    Oh boy, another "two sides of the same coin" joker...

    You guys lost all credibility after 2000, you realize this don't you?
  • Obamanut wrote: Oh boy, another "two sides of the same coin" joker...

    You guys lost all credibility after 2000, you realize this don't you?
    I would say that there are significant differences, but as far as the deficit and the national debt, they both suck (a LOT) and haven't a clue.

    And we won't have to worry about them being on the same coin, either will make sure there ain't a coin to spare...
  • I was wondering, isn't this partially the result of those years of artificially low interest rates from Greenspan? I know it kept the economy chugging, but it seems like borrowing money was too cheap and encouraged recklessness. Why isn't anyone blaming him?
  • mitchell73 wrote: I was wondering, isn't this partially the result of those years of artificially low interest rates from Greenspan? I know it kept the economy chugging, but it seems like borrowing money was too cheap and encouraged recklessness. Why isn't anyone blaming him?
    Funny you should mention it- I was listening to a reporter on 1010 this morning and they were interviewing some poor ex-Lehman guy carrying his office-in-a-box. They asked him what was to blame. He said one word over and over: "Greenspan."
  • so, if I borrow money because it has a low rate and/or they lend it to me because they were too lazy to check my references, then I somehow I get to blame the bank when I can't repay it?

    ...am I the only one who thinks the government should only have a minimal role in rescuing such banks and borrowers? ...if the economy is going to collapse, yes, the government should prop them up ...but if its just going to cause people to only borrow what they can pay back, and the banks to only lend to people who have a chance of paying it back.... I don't see the problem.

    The whole country has been living off borrowed money to prop up its economy. At some point someone has to stop lending it to us, and we have to start living within our means. Yes, that means we will no longer have the illusion of being one of the richest countries in the world. It's ok to be 4th or 5th...
  • whynot_31 wrote:

    The whole contry has been living off borrowed money to prop up its economy. At some point someone has to stop lending it to us, and we have to start living within our means. Yes, that means we will no longer have the illusion of being one of the richest countries in the world. It's ok to be 4th or 5th...
    Living off borrowed money.

    Living off speculative development to sell to someone who wanted only to flip it to the next sucker.

    Where are all these people going to go now that this industry has cratered. It was the ony bright spot in our economy.
  • it's like the internet boom with all of the sites that somehow worth ore based on how many hits they got. ...none of them made any actual profit.

    Likewise, you putting granite in your Akron OH home may increase its value on paper, but no one has actually purchased it. You don't have a buyer, and they should be the ones who actually determine a homes value ...not banks or real estate agents.

    ...the banks and real estate agents told buyers the homes were valued at the amount of the loans, and the buyer signed on the dotted line. If the banks can get the profit when you pay the loan back, the gov should not bail them out when the market turns and the borrowers can't pay them back. ....it sucks to be a banker and a borrower in that circumstance, but it shouldn't suck to be a tax payer.
  • I thought God didn't have a country...

    Fasten your seat belts, this depression is going to be a doozy!

    Even if the government and citizens begin to act responsibly, the economy will be a mess for years to come. But don't get your hopes up that anyone is going to start acting like adults just yet, "culture wars II" is now on dvd.
    If you really believe that McCain/Palin will yield the same result as Obama/Biden, you need to think through the scenario again.

    The war is off budget ($600 plus billion and increasing $12B per month).
    The Bear Sterns bailout is off budget ($29B).
    Freddie Mac / Fannie Mae is off budget (maybe $300B plus).
    Bush's current budget should be at least $350 Billion higher than the projected $407 billion deficit.

    Now we are talking real money - single year budget decifits of ove $750 billion.

    Kiss your retirement goodbye (if there is anything left after today's 500 point plunge).

    But I don't agree this is good for New York City, or the United States.
  • maybe the europeans will continue to prop up NYC's economy. ...I can hope.

    I can learn French?
  • I heard you can make a bundle in Alpacas

    http://www.alpacainfo.com/
  • can I borrow against my house to buy some? ...they look cute.

    Will the government bail us out if we all buy them, and then they are struck by some strange fungus?
  • Well, I think you can qualify for farm subsidies with them...
  • NYTIMES .COM

    The financial crisis entered a potentially dangerous new phase on Wednesday when many credit markets stopped working normally as investors around the world frantically moved their money into the safest investments, like Treasury bills.

    Key word: dangerous.

    I am not an alarmist but when someone as studied as Greenspan describes this as a one in a century event (despite the fact that he helped create it), I think we are in deep doo doo.
  • You think they'd let my Alpacas graze in Prospect park?

    If it gets really cold, and heat becomes too expensive, can I slay my Alpaca and then sleep inside it (ala Star Wars)?

    Can we retitle thread this the Four Alpacamen?
  • Gold, chocolate, and stiff-necked art seem to be the investments of choice now. Oh, and treasury bills.

    Again say: We are truly, truly in deep doo-doo.

    Delay that retirement a decade or two.
  • What happens in six months, when the average american realizes that the rest of the world is not in a bad recession ...just the US? Yes, the US will have slowed the world economy for a while, but we are one of the few that is fundamentally unsound.

    They will blame someone ...immigrants, Iran, someone.

    This is the day I fear, not the depression itself.
  • Europe and part of asia are in recession.
  • yes, but they do not carry the same amount of debt. Their investments are down because they invested here....

    Their economies are not tied to speculation to the same degree as ours.
  • When Asia stops buying our debt we are really screwed.
  • madman wrote: When Asia stops buying our debt we are really screwed.
    yup, but the optimistic side of me says they'll "save" their money in productive forms....

    Faced with low returns from investment in the stock market, they could:
    Invest in parks for the populace.
    Implement pollution standards to clean up the air they breath.

    ...and other ways of investing that almost exclusively benefit their own country.

    Coal ash, for example, mostly falls back to earth within 500 miles.
  • Funny how everyone becomes a socialist when these big financial institutions start failing.
  • With an impending depression on the horizon,it may be time to think about becoming a used stroller dealer.
  • MeredithB wrote: Funny how everyone becomes a socialist when these big financial institutions start failing.
    I'm not the one who nationalized most off the nation's mortgage debt, but can likley dig up a DSA card with my name dating back to '88 (ah, college...)

    P.S. DSA, if still around, stands for democratic socialists of america
  • as it turns out, we have more to fear from unregulated capitalists than we do from any socialists.
  • the availablility of cheap pot, combined with an insistance on reaching consensus is what made my DSA chapter a non-threat.

    But, back on topic: When the economy is down, vices are usually a good place to invest. Tobacco, credit cards, etc.

    Inferior goods and places that prey on the misfortunes of others are also good investments: Western Union, check cashining, bail bonds, Walmart.
  • *Bump* In light of todays biggest stock market single day loss in history, I want to know "when" (not if) we wil officially begin to feel raped and pillaged?

    Anyone?

    This is either the biggest bank robbery in history, or the biggest bank robbery hoax that forces us to hand over all of our money, thus resulting in the biggest bank robbery in history. Either way, we seem destined to be ravaged and savaged without true consent.
  • we can either pay for it now or later

    ...by creating 700 billion in new money the populace would have had to pay for it later. (How very Keynesian!)

    ...by letting the market free fall, we pay for it now.
  • whynot_31 wrote: we can either pay for it now or later

    ...by creating 700 billion in new money the populace would have had to pay for it later. (How very Keynesian!)

    ...by letting the market free fall, we pay for it now.
    well, it certainly feels like a deliberate flush, despite all of the posturing and partisan bickering.
  • I'm not a complete pessimist, I am confident there is a bottom. The United States should have standard of living that matches its exports and ability to support itself. ...we have had an inflated standard of living as a result of borrowing for quite sometime.

    We are presently saddled with debt, and have not invested in physical infrastructure (bridges, information highway, etc) or education in quite sometime.

    We sat back stating "we are the best in the world". ...Well, the rest of the world has caught up ...and in some cases "passed us". ...they seem to be tired of paying us to do what they can do for themselves, and tired of giving us their exports for the inflated US dollar. They also no longer fear our military.

    So, capitalism will determine our country's worth and wage. Ready?

    While we've been busy borrowing to cover the trade and budget deficits, we've blamed the entitlement programs received by the poor (note, these are the ones that not Social Security and Medicare) for our so called declining standard of living, and demolished the safety net. There's about to be a lot more poor to mistakenly blame. Ready?

    ...As jobs become scarce, enforcement of immigration rules are going to be ramped up. ...this will be a futile attempt by citizens to maintain thier undeserved/uncompetitive/inflated wages. Ready?

    This is going to be quite a ride ...I'm thinking Asia is looking good.
  • when unemployment rises, credit card defaults and foreclosures will do likewise. Crime will join the trend as people get more desperate, at the same time that slashed municipal budgets will result in less police, and less services for drug and alcohol treatments. Things are going to get very ugly before they start to get better.

    prepare to bend over
  • just invest in Walmart and credit cards; you'll be fine.

    If NYS is smart it will collect as much of the "voluntary tax" as it can. You know, the tax that people are actually more willing to pay as times are more desperate: The lottery.
  • mitchell73 wrote: I was wondering, isn't this partially the result of those years of artificially low interest rates from Greenspan? I know it kept the economy chugging, but it seems like borrowing money was too cheap and encouraged recklessness. Why isn't anyone blaming him?
    Things I learned from This American Life/NPR (by memory, so a bit rough):

    1. The Global Pool of Money essentially doubled from $35 trillion to $70 trillion since 2000 (so it took thousands of years to get to $35 trillion, and about 5 years to get to $70 trillion).

    2. The Global Pool of Money grew so fast because a lot of pretty poor countries suddenly got pretty prosperous, through selling electronics, services, etc.

    3. The Global Pool of Money likes conservative investments, like US Treasury Bills.

    4. However, Alan Greenspan keeping the federal rate "absurdly low" at 1% made US Treasury bills a terrible deal.

    5. The Global Pool of Money looked elsewhere for investments. It turns out they LOVED these roll-up mortgage packages (I forget the terminology). You are essentially buying a share of a mortgage payment stream for thousands of mortgages.

    6. Brokers went crazy trying to satisfy this demand. When they couldn't find acceptable borrowers, a few maverick lenders lowered their standards.

    7. Brokers got desperate to write new mortgage loans. They came up with ridiculous and insane products like the NINA loan: No Income, No Assets - no proof needed. You essentially are being asked to lie to the mortgage company about your finances.

    8. The brokers all followed suit on incredibly risky loans and loose lending criteria. Some out of greed, some just to stay in business. They thought everything was fine because they were looking at historical data on defaults, which were around 2%. They thought that even in the absolute worst-case scenario - 10% defaults, say - they would still be fine.

    9. As it tuns out, some people were so unqualified that they were defaulting on the first payment. They were underwater the moment they signed. As this default problem became more apparent, the banks quickly became very picky on what types of loans they would buy from the brokers. The brokers started going out of business.

    10. All hell is breaking loose. Some of these mortgage roll-up investments are expected to reach a default rate of FIFTY PERCENT or higher. In an interview, the hotshot sales guy who was making $25000 a month now has both his million dollar homes in foreclosure.

    11. Notice how it's no longer called the "mortgage crisis" but the "credit crisis". It's going to get much more difficult to get any kind of credit.

    12. Experts said the foreseeable future is going to be like the economically depressed 1970s, rather than a 1930s style Great Depression. Unfortunately, this piece was recorded prior to the current $700 billion Bailout fiasco. So we may become a nation of hobos wearing pickle barrels.
  • 5. The Global Pool of Money looked elsewhere for investments. It turns out they LOVED these roll-up mortgage packages (I forget the terminology). You are essentially buying a share of a mortgage payment stream for thousands of mortgages.


    They're called Commercial Mortgage Backed Securities, or CMBS Pools. And they're f*cking killing the economy. In addition to being incredibly short-sighted investments, ratings agencies such as Moodys and Fitch had the audacity to give these sucker bets triple A ratings, thereby guaranteeing investors would flock to them.

    If something is triple A rated, one tends to assume that it would be difficult to lose money on them, or at least less likely than other investments. CMBS Pools should have been rated far less. Like maybe B, or even less. But hey, 20/20 hindsight.
  • You can take a step back from CMBS's and CDO's and just realize that we don't make shit in this country anymore. We're a service economy, a consumer spending economy. So with nothing else to put their money into, these investors put their money into real estate, seemingly the only thing we have of value.

    Which is why you should vote for Obama. Bullshit or not, at least he brought up the idea of the US manufacturing tomorrow's non-gasoline cars. We need to get back to being innovative and we need to get back to building things.
  • ..we could just invest in infrastructure.

    ...bridges, roads, rail lines, train cars, etc. The service economy won't work if you producing very low value services.
  • Old Time Brooklyn wrote: You can take a step back from CMBS's and CDO's and just realize that we don't make shit in this country anymore. We're a service economy, a consumer spending economy. So with nothing else to put their money into, these investors put their money into real estate, seemingly the only thing we have of value.
    Well, that's not exactly accurate. Investors put their money in debt, not real estate. If people had put their money in real estate, in actually owning an asset - maintaining leasing, rent rolls, property operations and maintenance - in a long-term hold as a source of income (as opposed to idiots flipping real estate in the hope to get quick, large sums of cash), then we'd be on much more stable ground. Investing in debt was clearly not the way to go.

    You are quite accurate in saying that this is a service society, one in which we no longer manufacture products. I also tend to believe you are right in the whole vote for Obama thing.
  • But real estate is the basis of the debt. And as most homeowners see a mortgage as a "good" debt, so did these investors. But the only reason they did is because there's nothing else for them to bet on in this country. Again, the only thing we really have of value is what's between the Pacific and Atlantic Oceans. Maybe movies. Maybe patents. But little else.
  • With the advent of genetic crops, good pesticides, fertilizer, etc, excellent farm land is worth less than it once was... The world is becoming less dependent on America's bread basket.

    ...so, we have a lot of people who feel they are entitled to have the highest standard of living in the world, even though they no longer are.

    And, we have politicians who are afraid to tell people "under me, your standard of living will decline to where it should be. The world is no longer afraid of our military, and has caught up to us".

    ...so we (the goernment, the private citizens, the corporations, etc) have all borrowed and lied to ourselves and each other to maintain the illusion of superiority. The illusion can only be maintained for so long.

    I'm not sure this is "the end of America's era", but its definately time to examine the foundation.
  • mantic wrote: Sheeple better wake tfu.
    image
  • They look like they'd be tasty up in hurr:

    image
  • Old Time Brooklyn wrote: You can take a step back from CMBS's and CDO's and just realize that we don't make shit in this country anymore. We're a service economy, a consumer spending economy. So with nothing else to put their money into, these investors put their money into real estate, seemingly the only thing we have of value.

    Which is why you should vote for Obama. Bullshit or not, at least he brought up the idea of the US manufacturing tomorrow's non-gasoline cars. We need to get back to being innovative and we need to get back to building things.
    Hear, hear otb. Our only way out of this is to re-invent America into a high-skilled workforce creating solutions to problems for which there is actual demand for solutions, such as energy, IT infrastucture.

    Save that, our only exportable good is a simulcra, idealized verion of glamour and it's trappings, that will erod as its underpuinnings erode: fashion, entertainment, advertising. Bollywood is the counterpoint to this argument.

    America, if it ever was a house on hill, was so because we let imagintations free reign.

    Yes we can.
  • My favorite Horseman: Arn Anderson.
  • Lo Kee wrote: [quote=Old Time Brooklyn]You can take a step back from CMBS's and CDO's and just realize that we don't make shit in this country anymore. We're a service economy, a consumer spending economy. So with nothing else to put their money into, these investors put their money into real estate, seemingly the only thing we have of value.

    Which is why you should vote for Obama. Bullshit or not, at least he brought up the idea of the US manufacturing tomorrow's non-gasoline cars. We need to get back to being innovative and we need to get back to building things.
    Hear, hear otb. Our only way out of this is to re-invent America into a high-skilled workforce creating solutions to problems for which there is actual demand for solutions, such as energy, IT infrastucture.

    Save that, our only exportable good is a simulcra, idealized verion of glamour and it's trappings, that will erod as its underpuinnings erode: fashion, entertainment, advertising. Bollywood is the counterpoint to this argument.

    America, if it ever was a house on hill, was so because we let imagintations free reign.

    Yes we can.

    expanding on this theme:


    http://news.cnet.com/8301-11128_3-10056099-54.html



    October 1, 2008 8:58 PM PDT

    Google CEO: How to fix U.S. energy problems
    Posted by Stephen Shankland 68 comments



    SAN FRANCISCO--The United States government has been unable to fix the country's energy problems, Google Chief Executive Eric Schmidt said, but the Internet giant on Wednesday proposed its own 22-year solution.

    "We have seen a total and complete failure of leadership in the political parties of the United States," Schmidt said in a speech at the Commonwealth Club here. "We've been working on a plan to help solve this problem."



    Google CEO Eric Schmidt describes the company's energy plan.

    (Credit: Stephen Shankland/CNET News)

    Earlier in the day, Google unveiled that plan, which doesn't lack for chutzpah: Clean Energy 2030 aims to wean the United States from its dependence on fossil fuels within 22 years.

    Schmidt said the plan requires $4.5 trillion in spending to pull it off, but it'll pay for itself with $5.5 trillion in savings. "With this plan, it's cheaper to fix global warming than it is to ignore it," Schmidt said.

    The general plan consists of various efforts to save energy; a shift to renewable wind, geothermal, and solar energy; and a complete cessation of energy from coal and oil and halving of natural gas. Those changes would cut energy production-related carbon dioxide emissions from about 6 billion metric tons per year today to 4 billion per year in 2030.

    Energy efficiency is at the forefront of Google's thoughts: the company operates hundreds of thousands of servers, and the company has warned that energy costs could outpace server hardware costs. So a decline in energy costs makes practical sense, Schmidt said.

    "We save a lot of money when prices go down. It's good for shareholders, good for earnings," he said.

    However, he made clear in a meeting with reporters later that the effort is also driven by the moral beliefs of Google's co-founders, Larry Page and Sergey Brin.

    Also on Wednesday, Google announced the fruits of its effort to increase the energy efficiency of its data centers.



    Google's Clean Energy 2030 plan would completely eliminate coal and oil use for energy production in 22 years.

    (Credit: Google)

    Economic stimulus
    The present financial crisis, with an expected bailout that will cost $700 billion, likely will be followed by further economic stimulus spending that likely will reach $100 million, Schmidt predicted.

    "Why not use that money to solve once and for all the things we debate: energy security, rising oil prices, a lack of jobs--especially in rural areas--(and) a lack of technology investment?" Schmidt said. "If you follow my reasoning and take advantage of the technological opportunities--and the apparent willingness of the government to write large checks during a crisis--we can do this."

    He acknowledged that the problem will require sustained attention to solve, but said that's the job of governments. "The government spends lots of money on many things that are strategic. It seems to me that energy independence, given the history of the last 10 years, should be at the top of the list," Schmidt said.



    Google predicts energy-related carbon dioxide emissions will drop by about a third with its plan.

    (Credit: Google)

    Energy plan details
    How does Google propose to transform the country's energy usage? Here's Google's description:

    • Deploying aggressive end-use electrical energy efficiency measures (about 1.4 percent per year savings) to reduce demand 33 percent.

    • Replacing all coal and oil electricity generation, and about half of that from natural gas, with renewable electricity: 380 gigawatts (GW) wind: 300 GW onshore + 80 GW offshore; 250 GW solar: 170 GW photovoltaic + 80 GW concentrating solar power; 80 GW geothermal: 15 GW conventional + 65 GW enhanced geothermal systems

    • Increasing plug-in vehicles (hybrids & pure electrics) to 90 percent of new car sales in 2030, reaching 42 percent of the total U.S. fleet that year

    • Increasing new conventional vehicle fuel efficiency from 31 mpg to 45 mpg in 2030

    • Accelerating the turnover of the vehicle fleet from 19 to 13 years (resulting in 25 million new vehicle sales per year in 2030, a 31 percent increase over the baseline)

    Advising Obama
    Schmidt, who said he's an adviser to Sen. Barack Obama's presidential campaign, said he prefers that candidate's energy plans. "The Obama program is more in line with the one I'm describing," Schmidt said.

    He also dinged Republicans for using the term "clean coal," which he called an oxymoron not unlike "limited nuclear war," and said that offshore oil drilling, although a lively topic of debate, will satisfy only a tiny fraction of the nation's needs and only five years from now at that.

    Now is the time to offer the plan, according to author Jeffery Greenblatt, climate and energy technology manager for the company's philanthropic Google.org arm.

    "With a new administration and Congress--and multiple energy-related imperatives--this is an opportune, perhaps unprecedented, moment to move from plan to action," Greenblatt said.
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