While one drop of water added to an ocean does not seem to change the overall system, it inherently does in some respects, much as any small draft of air changes the atmosphere of a place and influences the system in some way. Macro-economic systems are most like dimensional fluid system models given to be influenced by flow rates, thermodynamics, fluctuations of pressure and degrees of change within event horizons of elapsed time, constraints of environment, among other things. So too, are macro-economic systems inclined to be influenced, to maintain a non-ordinary type of equilibrium and to vary from mean (absolute) stability by extraordinary amounts within the tolerance of internal (good, healthy) balance. They are really quite remarkable.
So, to the questions –
* What would create stability in the world economies as efficiently and effectively as possible, in the most natural, and non-obstructive, non-obtrusive manner?
1. Tell everybody in America to take $10 and using basic skills of business (as an applied science) – make it into $20 in less than a week without spending $500 to do it. That’s first because if they can figure out how to do that they can probably get their own financial house in order in some measure.
2. Second, is to put in place the proper and appropriate legislation to correct and regulate the financial sectors including re-creating any and all mortgage instruments (in place) that exist as an ARM or any similar type thereof. And, make it illegal to create such mortgages as ARM and “Interest Only” in the future.
3. Next, or simultaneously, pay the money directly to the foreign investors that are behind the scenes hounding us for it at ½ of 1% face value as an intermediate stopgap measure and explain it for “what is actually being done and why,” in an honest manner.
4. Re-regulate as should have been done or should have been left in place all along to force prudent lending / borrowing practices regardless of the industry. This would go farther to create stability and restore “trust” than any one other thing.
5. Drop hindrances in the marketplace as mentioned from startup filings and fees to visa and passport and patent fees / licensing fees. Add capital flows to regional, community and local banks specified to help grow businesses in the communities. And, fix this mess that some call, government inaction, ineptitude and dismal performance “business-as-usual.”
6. Well, sixth would be a couple of things and they go hand-in-hand. Since government bailouts are the order of the day, use some of those trillions to buy lined paper and pencils to give (free of charge and not by mail) to each and every American individual. This includes a set for every member of every family. And, a simple one-page synopsis to inspire its appropriate use such that they can help themselves and show their children how to do the same.
7. Get off the dime – because the same old song and dance isn’t going to get it anymore. Excluding some in the name of whatever the benefit to a few, isn’t based in the principles and foundations of democracy and equal opportunity for all.
Either, a.) facilitate it, or b.) get out of the way.
Written by Cricket Diane C “Sparky” Phillips, 09-27-08, USA
September 27, 2008 Posted by cricketdiane |
** My note added today –
* The system needs risk assessments / ratings for banks and financial industries based on fundamentals with real-time accuracy. Traditional valuation metrics and models do not apply any longer and new accurate models need to be created which accommodate fluctuations in current real-time values more closely aligned with when those fluctuations occur.
* Projections forecast from previous years, previous recessions or even, previous months are not predictive in the current situation. Using these to forecast anything in the economy or in a business or industry is certain to be inaccurate to a widely unpredictable and varying degree.
– cricketdiane, 01-30-09
***
Inventing Solutions For America – Ways to Stop the Free Fall of the Economy while protecting our Republic and free market systems –
Are there any ways to maintain our free market systems integrity and stop the free fall of our economy while preserving our representative republic and principles of democracy?
* we need to get some options on the table first of all. With many, many great and innovative ideas along with known methods and their consequences, it would seem we have plenty that could work in some combination. But, these are not on the table as viable options and they must be to even be considered.
* money and money-making enterprise do not happen in an isolated system – meaning that economics in a broad sense is flowing, fluid and dynamic rather than closed-loop stasis or “static”. Some, in fact many, options that may work well in a closed-loop or static system don’t work in the same manner on macro-economies of scale.
At the point in which a macro-economy becomes static and ceases to be a moving target to be fixed, it is normally too late to mask its demise. Certainly, its “fixable” but not only do many corrections and stimulations need to be done simultaneously, but also the anticipated results and predictable outcome aspects are harder to adjust.
However, that being said, the greatest one solution that I can see is to awaken a new and extraordinary set of business models that serve the needs of our country and a global consumer base. That’s my opinion.
A set of new and more adequate technology groups, applications of current advances into business as products and services, applications of advances into transportation and supply services sectors, along with a greater use of effective, lower overhead delivery and marketing systems could make genuine positive change in the system.
It is not always about creating something nor in stimulating the manufacture of products (as has been made obvious in the intangibles being sold in financial markets.) However, at its core, without creating something, manufacturing something, selling some things that are tangible and concrete, without providing for real needs in the lives of people who as consumers, purchase them – there isn’t a marketplace nor macro economy construct, nor one to be fixed from disrepair and demise.
It is an absolute fact that money can serve no end but in trading for a commodity of some kind, by definition. It can’t provide nourishment by eating it, doesn’t warm nor clothe, and in the throes of our Great Society still won’t give its owner the basic provision of needs unless traded in acquisition of them.
Consequently, as a model of efficiency and first thrust while maintaining a form of government and market driven economy to which we’ve agreed, a number of influences can be rightly made.
Change the level of regulations downward and to a far less stringent and costly basis for start-ups of small and medium-sized businesses to stimulate immediate growth.
Enhance manufacturing incentives for companies in existence and starting up to apply new advances and technologies while helping to lower costs and train to use them and to apply them effectively.
Make it easier to sell wherever there are markets available for it without fourteen tons of paperwork, regulations and customs documents to do business anywhere around the world.
Encourage development of existing consumer-based possibilities by adding capital across the board into small and regional banks / community banks precisely for startups, for expansion, refurbishment, new technology and new employee hires to be made in the community.
Help make paperwork and systems supporting employees more user-friendly, based in reality and efficient.
Provide education to a higher level for all through direct subsidy of colleges to train any and all who would choose to participate of any age group. Provide innovation capital in a different way than currently exists whereby anyone can have some reasonable amount by application and good excuse to create what is theirs to create, barring none from access to this opportunity either by its difficulty, its screening process, its qualifiers for application, its costs or by virtue of no one knowing about it.
Stop micro-managing the twit out of everything as a government entity with four miles of paperwork, reports and time-consuming, man-hour consuming processes which are not providing oversight, coordination nor better service delivery. It would be helpful if the degree of coordination within the government among its members and agencies and programs were enhanced. But without an interface of coordinated and flowing interaction with the communities its serves, the government serves no useful purpose. Great strides in these areas have been made but some old ways are still stuck on stupid and remain to this day and to our great detriment.
Stop using our department of labor as a clearinghouse for jobs, screening and for potential employers to use as a temporary employment services agency and as a personnel / human resources department. That is not a facility of government nor of a democratic government, in particular, nor of a free market economy. It puts others in that business, out of business and out of employment. Free training was funded to be offered through DOL which has also become a hybrid of the antithesis of what was intended.
To many service workers and case managers in these human resources government agencies, programs that exist are unknown and at the local and state levels, the funds intended for the use of these programs have been diverted to other things. Often these funds are benefitting government employees, being used for training seminars and workshops to be covered for government employees in expense-laden convention and hotel facilities, giving bonuses and other opportunities to agency staff, administrators or local business “friends” and being diverted to cover pet projects and programs to the exclusion of others rather than where the funds were intended to help. These practices need to be stopped or modified.
Change passport, visa and international movement regulations, requirements and fees to something approaching good and common sense. It makes the opportunities to interact globally into a strange proposition of chance and undue expense. This includes movement of more than key executives wanting to vacation in Switzerland. The movement of business startups into the global arenas can be facilitated as well, but many small businesses could expand if their products and services could simply be offered in cities and regions across America where right now it is prohibitive.
Once fees, permits, licenses, registrations, patent fees, copyright fees, trademark fees, state filing fees and on and on, have been paid, applications made and not one sale has moved forward, why would anyone want to go through the process on the “iffy” chance it might work?
Written by Cricket Diane C “Sparky” Phillips, 09-27-08, USA
September 27, 2008 Posted by cricketdiane
***
The US economy is vibrant and dynamic. It is multi-dimensional. Financial institutions do not rest on a lateral one-dimensional level within the system. The stock market, as absurd a place as it is, does not constitute real value nor does it hold an inherent capacity to destroy the US and International economies. It was unnaturally given this power through a scheme to defraud with intent, perpetuated by those qualified and educated to know better.
This is impacting values by being allowed to underwrite debt as a tangible security with no actual validity or substance. Without real collateral to insure, they served as insurance illegally tendered and traded across massive arenas. Without tangible assets to back them up, counterfeit currency types and currency surrogates in the form of complex financial products were sold in trade for tangible assets of value.
The speculations of value were unregulated and corrupt. The arm of Congress determining legislation that would by statute, allow the counterfeit and fraud to be stopped were corrupt and the banking industry self-policing watchdogs were greed-driven and corrupt. Given the education level and expertise of all in these positions, they had every reason to know what it would cause ultimately.
What happens when one person gets taken in an insurance scam which either refuses a policy paid in good faith or is incapable of paying a return for premiums given? That can result in losses of several million dollars in actual fact, because of the insolvency it creates, missed opportunities to have sought secured insurance elsewhere and long-term impacts with no ability for restorations and immediate recovery.
Magnitude and multiply that out over the entire system of financial instruments in the US and International economies.
What happens when someone passes a counterfeit $20 bill? Whoever took it in trade for real products is out the twenty dollars and its use to purchase something of value.
What happens when that is in trillions of dollars? This is what has happened in a macroeconomic sense. It is not enough to throw some money at it to make up the difference in damage scenarios when it is this sizable and extraordinary.
When de-regulation made it possible to create complex and faulty financial products, it essentially counterfeited secure and healthy currency forms, counterfeited unsecured insurance products and substituted tangible assets for toxic, illiquid ones. Consequently, just as huge amounts of counterfeit dollars will tear apart the foundation of the macroeconomic structure, so have these introduced systemic structural fissures across the macro-economic systems of the US and around the world.
It is as if the market has been flooded with currency of no value which, unknown to the customer was traded for assets that had real value, such as real money, physical properties, and tangible assets, including stocks and facilities of actual companies.
The same damage has happened in both cases which involves systemic risk to the structural integrity of the system and its underlying fundamentals. As everyone has traded in these counterfeit currencies of unsecured and unwarranted value, the elements of our economy founded on relative international valuations of our real currency, the US dollar, and profit-driven dynamics of tangible assets have been undermined.
September 24, 2008 Posted by cricketdiane
In a macroeconomic sense – a nation and its underlying economic fundamentals are not like the structure of any business organization. It is because in an economy of scale, its components are nonlinear, progressive and intertwined whereas one shift in any part affects all other parts.
Such as when an increase in the cost or availability of gasoline, petroleum-based products and diesel fuel influenced all other elements in the system, barring none. Tangible shifts, however minute, expand across wide and varied elements within the structure and ultimately affect the whole as a self-driven, sustaining mechanism.
***
This is what we call a properly functioning market. When difficulties of this magnitude arise, fear and anger fuel the real world, long-term, far-reaching innovations that have made our world a better place and will inspire the applications of solutions to take our place in history as an improvement, rather than detriment.
The process of innovation is actually born in fear, not averted fear nor in diminished fear but in the real treacheries of fear.
September 25, 2008 Posted by cricketdiane
***
Is there any way that loans to these troubled industries would work? – I don’t see it –
What would be the natural consequences of making sizable loans or inter-industry trusts available to these industries?
1. they would want more, all the time it ends up being more, been there, done that.
2. they would by nature leave out some, possibly many deserving businesses which would fail.
3. they would be difficult to assess for collateral at real value and cumbersome to manage given the current off-balance sheet entities in place.
4. inter-industry trusts show more promise and in some respects represent facility because of their intimate knowledge of their counterparts. However, the government can’t fund them without sever consequence and abuse of these funds by the industries involved. The industries would have to pool resources and fund them, no wait – they’ve already done that and they’re the ones wanting the bailout from US coffers now.
5. See, the problem with taking assets (as the US government) is that the US government can’t be in the business of owning such assets nor of managing them and still have a free market economy. It fails to protect, enhance, progress nor strengthen capitalism but rather it becomes something else both as a system of government and as an economic model. It won’t do both capitalism and that at the same time.
6. Since there exists an immediate situation of concern and the American people have not agreed to another government and / or economic system – the loans having already been made, not having secured the situation as it stands – I would say that solution of ( the question of loans) doesn’t work.
7. These industries weren’t willing to take the necessary steps knowing them nor to adequately police themselves and their activities having a proclivity to abuses already. How can they be given a loan on bad debt that will simply be converted into another loan of 10x’s that “asset value” as a continuation of the same processes? Isn’t that the problem now as it is?
8. It seems neither grants, loans, bailouts, financial rescue packages or permits to steal are actually having any long-term positive effects given the nearly $1.1 trillion dollars +/- already used this year alone.
9. so – is there any way it could work? the basic problem is one of quality. So long as banking practices are to borrow 10:1 against assets while loaning 1:4 or 1:5 against assets then keeping the difference and not reinvesting into the safety and security of their businesses – how can any amount of money help in this? This manner of “prudence” is not prudent, not financially sound and while profitable, is not a good macro economic model for growth and prosperity. It will always yield the problem we are having now – that is what it does when done this way.
Written by Cricket Diane C “Sparky” Phillips, 092508, USA1
September 25, 2008 Posted by cricketdiane
* One definite plus is that going down at least there is movement. Apathy is bad at any place in the spectrum since it belies the essence of a stagnant and therefore, deteriorating economy, (even when it appears positive.)
Unfortunately, it would be easy to misinterpret apathy as stability which it is not. A stagnant economy promises bliss but delivers dangers of eroding and often overlooked, critically deteriorating foundations and structures. That is due in no small part, to the fact that healthy economies of scale are interactive, multi-dimensional and are fluid, oscillating structures, as a whole. It would be as if the entire ocean dried up or ceased all movement. The system would be stable in a sense but would certainly not thrived nor provide its measure.
* The other option that still has merit is an absolute and complete destruction of the questionable, unsecured and unregulated components at the heart of the mess. Then, let’s get some accountants in there and see what its all really worth from the valid profit / loss ratios and real assets. It would take an act of Congress that would, by necessity need to state unequivocally that no bankruptcies could be filed until all assets had been subjected to full accounting standards and disclosure with a revaluation entered on the Security and Exchange Commission’s books.
The shock of all the market players having to level the playing field by doing this at once would put all in the same boat with the equipment to repair it before it sinks. That is tangible enough for them to understand, anything else isn’t.
* There is one other thing I can think this moment would re-stimulate the credit/lending portion of the market. It is a principle of basic macroeconomics – make those financial and banking executives live for six months in the communities where the houses exist that they foreclosed. From there, they will see the potentials and possibilities to make money there with simply some influx of capital. And, believe me, they will not stand still long without making money.
* Of course, we could just put all of them in jail for the criminal nature of what they’ve done and for the destruction its caused. Under those laws of ill-gotten gain, even their underwear would revert to our ownership due to the laws in place since Reagan and subsequent Congressional legislation.
* The basic macro-economic principles upon which this is founded are “you can’t fix, what you don’t know exists,” and “when one thing is changed, all other things change in some measure.” It is the first and the most basic principles.
* If we want the bankers and decision-makers in the marketplace to work out something on the credit situation, we’re gonna have to get the traders, hedge fund managers and Wall Street brokers out of the way. The intense rumor-mongering and gossiping there has made the ladies at church socials look like amateurs.
* And, as much as I certainly don’t keep my opinions to myself, obviously, these folks have made more things intolerably worse that were already a very bad thing. The presumption of expertise for many involved in the market arena is easily more powerful by proximity. Within short order it could be averted by closing the markets for two days, locking the bankers in a room and tell them we’re not restarting the exchange until they’ve sorted out the credit squeeze and toxic assets (in a manner acceptable to our economy and all of us, including our government experts.) Let our taxpayers buy the coffee and they can rent the hotel.
* We could use solutions that we have that we already know don’t work – that’s always first on my list, so I’ll know where it is and what that was.
* We could close (shut down) the markets for two days so our traders and our investors would get hungry to do some more wild trading. Without that rush for two days, they might have to “get a life”, look around and see where they stand in the real world.
It might help if they had to tour our America for a few days to see all the closed up shops and have to talk to people but I suppose we can’t make them do that. But, it is a thought.
* Democracy was written into our foundation partly as a tenet of freedom but also as a way to measure parity. If opportunities exist only for some, then a Republic will not stand and will, sooner or later, fail to its own devices as it melts into Aristocracy, monarchy or some dissolute type of system.
There are always many ways to do anything where only a few are benefitted. The tenets of democracy remind me that what is required is to create solutions that benefit all, not just to do for a few at the expense of many.
* The way to create something that works is to use these innovations now when it matters most – not later after you’ve raped, pillaged and plundered the US Treasury and the authorities of the offices of President, Treasury, Federal Reserve, Securities and Exchange Commission, Office of Thrift Supervision and on and on and on – up to and including certain chairs in our Congress.
* And, I’ve already learned what it is like to live in the America they have created, that they have refused to protect, and that they have allowed and encouraged to be raped, pillaged and plundered by Wall Street and unmitigated, unrestricted trade in illegally created, unreliable credit products. The banking industry isn’t loaning money when they have manufactured the problems that exist for a faulty base of enterprise.
For some reason, sitting on the banking committee, our Congressmen and Senators thought that meant to do whatever the bankers believe will make them happy. And to what end?
Have they protected the value of our money? No, apparently not.
Have they seen to it that our homes were secure, that our jobs were available, that prosperity is available to each of us when pursued appropriately? Not just no, but hell no.
Have they insured that our economy is robust and vibrant and thriving? Obviously not.
Have they been making certain that our Democratic system and free market economy would survive their tenure and authority? Well – let’s see . . .
* That is, all of us are experiencing this disaster except the bankers and Congressional members who aren’t affected by their own criminal, negligent and corrupt business practices.
None of the Congress members passed necessary regulations to prevent this, but they knew to do it because Secretary Paulson brought them information from the international fiscal community that explained why it had to be done and the risks of not doing it.
They didn’t do anything to have protected our interests long before now and today, as usual, they are serving the bankers again.
* Leadership, in and of itself is not the answer to our plight. There is not now, nor will there ever be a preeminence in our leadership that extends beyond our own common sense as human beings and citizens alive in our time. For that would be a dictatorship in which we would have no part or decision to make.
* “Leadership” has refused to pass legislation making these faulty unsecured credit products that banks have been trading in and lending on back and forth into an illegal instrument. It has counterfeited the true value securities and contributed, not in part, but wholly to the crisis which we are all experiencing.
* Because they have served these banking industry and speculative traders and investment banking wants over what was best for us, they chose not to do anything about it to serve the interests of the same industry fraught with disregard that they are serving today.
* They’ve had the money and didn’t create jobs or keep jobs available because they weren’t willing to temper their profits and dividend payouts and borrowing against questionable assets and continuing to play the game and use their companies as a gambling fix. And, that is the only thing they are doing now at the expense of the American people and our futures one more time. It doesn’t matter to them that they destroy everything we hold dear to do it either. That’s obvious.
* Everyone knows as a matter of public record that laws have been twisted, manipulated and broken by these companies which have resulted in real losses for millions of people around the world along with destruction of markets here and abroad.
The individuals that have been involved can exert as much influence as they can bring to bear on this free credit card for their dangerous gambling behaviors but it won’t matter.
When the markets both in Wall Street and throughout the streets of the United States were impacted by their behaviors, very real and tangible results were caused in the lives, fortunes, opportunities and basic necessities of real people.
This affected real people’s lives in tangible and decimating ways around the world. It destroyed the livelihoods and communities to such an incredible extent that it is hard to imagine a Democrat or Republican ever sponsoring a bailout for the culprits.
* Another reason that the government bailout of banks, investment banks and finance companies isn’t going to work is because any business that participates in taking that money or selling worthless high-priced assets into it, will be known for the fraudulent, negligent and risky business it is. It will be known for engaging in shoddy, possibly criminal business practices for even needing to touch one cent of that money.
* It could not be that difficult to create a manageable system of regulations that can be reasonably followed by any business. But, as far as I know, when I go to borrow money the terms aren’t $40 for every $1 of collateral I offer.
And, from where I sit, the regulations about starting and maintaining a business and suiting the regulations that exist for any business I might have, are extraordinarily oppressive and little resemblance to possibility and practicality are in them.
Apparently that is not the case for these huge businesses with their staffs of people and experts and lawyers and typists and money coming out their ears.
And, with the accountants they have? How could they have not gotten this right?
* I say this because the takeover of AIG and others in the manner they were done was and still should be illegal for very sound and practical reasons. Aside from that, I would never build a company in a nation that would simply come in and take it over as it suits them and unfortunately, the country where I find myself is just such a country. Whether large or small enterprise, our nation has become a place where any business can be taken over by our government as it suits them to do so for a variety of reasons. I would say that fact has gone farther in drying up capital than any thing else. Why do business here when it isn’t user-friendly and after building the thing, our government can take it?
* It is an inordinate amount of power to make bad choices, that rests in the hands of our government today, when a choice is not a choice at all, nor a call for real solutions that work, nor a useful measure of anything except the opportunity to make law to get away with what should be illegal and to fail to make laws that should made.
* For every dollar that these companies take out of our US Treasury, they will face a factor many times over of lost trust, failure of public confidence and maybe even face legal difficulties from it later, however long it takes to catch up with necessary legislation and legal enforcement.
** It won’t be very long before it becomes obvious. Either these politicians are covering their own assets, which is possible, or they are covering the assets for a business interest or industry exerting enormous and persuasive pressure on them.
* It is an indication of something other than a capitalist economy but one rather of manipulation of law and derision. It is not built on strengths and ever growing to innovate, flex and respond. It is based on degradation of opportunities for all but a few. At a point, there would exist too few in the “game” to sustain itself and that could be what we have now in a sense. It is a highly destructive form and yields extremely unstable, vulnerable and eventually useless business environments. The businesses it produces must inherently be so too.
* When you’ve prohibited competition and free trade at many levels of our economy by excessive, restrictive and oppressive regulations and allowed no regulations at all in the sectors at the highest levels, it became a system unqualified to be considered a free market economy.
* Wall Street does not own Main Street – they just think they do. They’ve done this for a time to rob the profits and opportunities of Main Street to line their pockets, create their “golden parachutes” and to support their style of living to which no one should become accustomed considering how its been unnaturally and illegally manufactured.
They have been the most anti-social, psychotic and manic deputies of finance in the history of the human race – its little wonder that these financiers have served no sum gain but their own and done so without conscience nor remorse.
* Its getting a little inbred up there in Washington plans and processes never change – can’t be faulted for consistency. That’s wrong no matter how you look at it. Redefines “intellectual inbreeding” to a whole new level.
September 26, 2008 Posted by cricketdiane
** From Fast Money Show on cnbc tonight,
it was explained that the investment bankers were allowed to borrow $40 for every $1 (that’s one dollar) – they had in “assets” and who knows what those actually were. How does that work? If I have something from the dollar store, you will loan me $40 with that as collateral?
Whose idea was that? Why would anyone have failed to stop that practice and regulate it in an appropriate manner? Were the Congressional committees responsible for legislation on these matters, dead in their chairs or what? That defies the sense that anyone might have for sound business practices. And, I think the show indicated that banks put up a $1.00 as collateral assets to get $12 which, although somewhat better – what kind of financing mentality is that?
September 26, 2008 Posted by cricketdiane
* what would happen if we “hit the bottom” and had to start again? how soon would that happen? are there any ways to maintain free market systems integrity and stop the free fall of our economy while preserving our representative republic and principles of democracy?
* what would stimulate economic growth? as quickly as possible?
* what would create stability in the markets quickly, effectively and in the most natural, non-invasive and non-obstructive, non-obtrusive manner possible?
Creating workable solutions to the economic and credit crisis in the US and Intnl communities – First Step – Get the right questions –
September 25, 2008 Posted by cricketdiane
what would happen if we “hit the bottom” and had to start again? How soon would that happen? Are there any ways to maintain free market systems integrity and stop the free fall of our economy while preserving our representative republic and principles of democracy?
* we would bounce, probably scrubble about on the bottom for awhile and then we would get real solutions in place and restart. However, I’m not looking at a chart or analysis projection in front of me, so making do with the analysis in my head, I would almost bet we hit bottom last Thursday, so we’re already there. Or, rather its already come up to meet us depending on how its considered.
* if it is not considered the bottom and we have a further and more dramatic shift downward, what would that be? No matter what we do now by throwing money at the problem, jobs will continue to be lost by the rate of 60,000+ each month continuing well into next year. The figures for each month over the course of this year have been in the 80,000 +/- neighborhood except for April, I think it was, when the US government arbitrarily added 34,000 government jobs that artificially optimized the numbers. I think it would have been the month that entered as a determinant in economists’ view of “Recession” calls or not – anyway to make it look okay they added a whole bunch of government jobs and I never found confirmation for warm bodies being employed in any appreciable number of them.
* since the housing markets have been so severely and artificially inflated, for quite some time and due to the levels of mortgages that as ARMs will be resetting over the next year, that situation is only going to continue to grow. This will happen regardless unless a change in the mortgage structures is made.
* apparently the difficulties of this have gone about the same in consistently deteriorating conditions month to month since last year, easily observed in data. There were indications apparent to the international community economic commissions long before that because efforts were being made to demand the US make necessary corrections immediately since pre-2005.
* real unemployment is likely around 15% or higher and the Department of Labor is using numbers that are “filtered” to appear better than they are. The historical figures to which they are being compared were not based on number of new applicants for unemployment benefits. The actual numbers being espoused by the Dept. of Labor are not representative nor an accurate portrayal of reality because they only relate the number of first time requests for assistance through the unemployment benefit program.
From the time that employee benefits stop through unemployment insurance, they are no longer counted in the total even though they are very likely still unemployed. The small business owners whose businesses have been decimated already are not represented in these figures as unemployed either, because they aren’t allowed to apply for benefits. The elderly that have been being employed part or full time and been let go are not being counted. Those who were fired, quit or harassed into quitting are also not included. The other significant populations who were already 85% unemployed regardless of their employability are the disabled individuals and disenfranchised populations generally. These are most certainly not included in the figures either.
* percentages of foreclosures, while varying by area, are very likely well past 12%. Existing home sales numbers have been so (faulty) because of combining distressed property sales figures with full-price sales numbers, that these can’t be used for analysis. Home values have already taken a portion of the pricing adjustment, but not all. I had found a mortgage overview online that shows each state with a rollover and index of how many outstanding mortgages exist of different types, the number of mortgages in overdue status and similar elements. It shows a huge number of mortgages all over the country that are either already distressed or will soon be reset to their higher “ARM” adjustment rates. Since nothing is addressing this other than sparse state by state efforts, it is likely to increase the number of total foreclosures for the year and follow into next year.
* The bailout would devalue the currency by some critical degree however, having thought about whether that would be offset by other factors or mitigated in some specific manner – I’d say now that, no. The devaluation of our currency and current rate of inflation will not be offset for the 96% of the population and +/-97% of the economy where it would matter most.
* The number of jobs added each month to grow the economy in the United States is estimated to be (an additional) 150,000 per month. This had been a standard gauge of growth before the recent 18+ months of job losses that will not and have not been replaced in the economy. These losses of around 80,000 jobs each month will not be regained immediately. The 93% of jobs added since 2003 have been added, not by big business but apparently by small to medium-sized businesses, according to the foxbusiness news reports tonight. (Better look that one up, I was only half listening.) It is roughly accurate however, and the actual numbers and percentages can be located through the National Association of Small Business Owners or through the Chamber of Commerce, Federal Reserve, Department of Commerce and CIA databook / factbook data pages, (by city, region, state, national and by dates.)
* For new building permits and other new projects – my guess is that those will happen in some manner because the government at the state, local and federal levels stimulates these directly. The commercial projects in my area have restarted already with refurbishing of malls, strip shopping center developments being started or continuing, stores being refurbished, etc.
Written by Cricket Diane C Sparky Phillips, 09-26-08, USA
September 27, 2008 Posted by cricketdiane
Dimensional systems cannot be fully stabilized in the same sense as one boat or ship can be, that rests only on the surface or submerged within it. In macro economic and other dimensional systems there is a point of dynamic harmony that can be reached – an imperfect equilibrium that can be (not kept or maintained), but rather allowed to move and develop in place. It will reach its own oscillating zenith and nadir points along a dimensional axis, which means more or less, its own (Mandlebrott style grouping) but in a multi-dimensional array. That seems clearer in my mind than to say it but what it shows is a propensity to and always toward chaos (as seen in chaos theory) and away from linear stability in any one given direction. This is by nature as it should be, (and part of why flat, linear graphs fail to convey the system properly.)
September 27, 2008 Posted by cricketdiane
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At the point in which a macro-economy becomes static and ceases to be a moving target to be fixed, it is normally too late to mask its demise. Certainly, its “fixable” but not only do many corrections and stimulations need to be done simultaneously, but also the anticipated results and predictable outcome aspects are harder to adjust.
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Purchasing the mortgage instruments from banks, investors, and companies to bail out banks for the purposes and functions of liquidity does not do one significant thing to insure that the unfair and untenable mortgage products subjecting homeowners to financial and property loss are properly corrected.
And so – back to the questions for “Inventing Solutions for America”
* what would create stability in the markets quickly, effectively and in the most natural, non-invasive and non-obstructive, non-obtrusive manner possible?
* what would stimulate economic growth? As quickly as possible?
Strangely enough, I had to put these questions together to answer them because in some ways they are the same thing. And, in other ways to do the one prohibits the other, either way.
* now, before I get accused of insensitivity – which may be the case, regardless, – the best way for me to know what the hands available to me are capable of doing in order to help myself, is to get paper and pencil to the task. It reminds me of the only assurance I have of available help that can be trusted in any real measure.
* As much as we gather hand-in-hand to a task or to the accomplishment of a set of tasks and goals, will they rest in our hearts and minds as we walk in our dreams and own imaginings of the possibilities, innovate solutions and create what can work to make things better?
* I might be insensitive suggesting that everyone in America be given paper and pencil to work it out – but there you go – it does work – there is a sense that is inspired beyond reason and creative, innovative and inventive, as well as powerful. The best place I know to start for any great accomplishment of fact is in a pencil and paper.
September 27, 2008 Posted by cricketdiane
It is an absolute fact that money can serve no end but in trading for a commodity of some kind, by definition. It can’t provide nourishment by eating it, doesn’t warm nor clothe, and in the throes of our Great Society still won’t give its owner the basic provision of needs unless traded in acquisition of them.
Consequently, as a model of efficiency and first thrust while maintaining a form of government and market driven economy to which we’ve agreed, a number of influences can be rightly made. Change the level of regulations downward and to a far less stringent and costly basis for start-ups of small and medium-sized businesses to stimulate immediate growth. Enhance manufacturing incentives for companies in existence and starting up to apply new advances and technologies while helping to lower costs and train to use them and to apply them effectively. Encourage development of existing consumer-based possibilities by adding capital across the board into small and regional banks / community banks precisely for startups, for expansion, refurbishment, new technology and new employee hires to be made in the community. Help make paperwork and systems supporting employees more user-friendly, based in reality and efficient.
September 27, 2008 Posted by cricketdiane
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Now the U.S. presses printing money are melting while more overseas investors are closing their investment checkbooks.
Only the tip of the iceberg showing so far as the U.S. government has loaned, invested or committed …
* $200 billion to nationalize the world’s two largest mortgage companies, Fannie Mae and Freddie Mac;
* $25 billion for the Big Three auto manufacturers;
* $29 billion for Bear Stearns;
* $150 billion for AIG;
* $350 billion for Citigroup;
* $300 billion for the Federal Housing Administration rescue bill to refinance bad mortgages;
* $87 billion to pay back JPMorgan Chase for bad Lehman Brothers trades;
* $200 billion in loans to banks under the Fed’s Reserve Term Auction Facility (TAF);
* $50 billion to support short-term corporate IOUs held by money market mutual funds;
* $500 billion to rescue various credit markets;
* $620 billion for industrial nations, including the Bank of Canada, Bank of England, Bank of Japan, National Bank of Denmark, European Central Bank, Bank of Norway, Reserve Bank of Australia, Bank of Sweden, and Swiss National Bank;
* $120 billion in aid for emerging markets, including the central banks of Brazil, Mexico, South Korea and Singapore;
* Trillions to guarantee the FDIC’s new, expanded bank deposit insurance coverage from $100,000 to $250,000; plus …
* More trillions for other sweeping guarantees.
The grand total? A mind-blowing $7.8 trillion and counting!
U.S. mortgage foreclosures, delinquencies hit record high