Illinois needs a bailout
m9...@mail.com
populous U.S. state, is $4 billion behind in paying bills to its
suppliers of goods and services, Comptroller Dan Hynes said. Vendors
face a 12-week delay in getting paid, and the wait may extend to 20
weeks, Hynes said… The ‘unprecedented’ backlog of bills might grow to
$5 billion by March… ‘To call this an imminent crisis is an
understatement,’ said Hynes… The payment delays may hurt school
districts waiting for funding and force state police to park vehicles
if vendors stop supplying gasoline, Hynes said. The situation also
may
affect food supplies to state prisons, physician services to Medicaid
recipients and funding of transit agencies, he said.”
November 13 – Bloomberg (David Scheer): “John Whitehead, former co-
chairman of Goldman Sachs Group Inc., said the economy may slump
deeper than it did during the Great Depression and that a growing
U.S.
deficit threatens the country’s creditworthiness, Reuters reported…
The nation’s record deficit is poised to balloon as the public calls
on government for more support, he said. ‘I think it would be worse
than the Depression… We’re talking about reducing the credit of the
United States of America, which is the backbone of the economic
system.’”
November 13 – Wall Street Journal (Miguel Bustillo): “Best Buy Co.,
the nation’s largest consumer electronics chain, sent a shiver
through
the retail and financial markets Wednesday as it sharply reduced its
profit forecast due to plummeting sales… the… retailer warned sales
for the final four months of its fiscal year ending Feb. 28 could
decline 5% to 15%... ‘Since mid-September, rapid, seismic changes in
consumer behavior have created the most difficult climate we’ve ever
seen,’ Best Buy Chief Executive Brad Anderson said. ‘Best Buy simply
can’t adjust fast enough to maintain our earnings momentum for this
year.’”
November 14 – Bloomberg (Shobhana Chandra and Bob Willis): “Retail
sales and prices of goods imported to the U.S. dropped by the most on
record, signaling the economy may be in its worst slump in decades.
Purchases fell 2.8% in October, the fourth straight decline…”
November 10 – MarketNews International (Claudia Hirsch):
“Containerized export volumes dropped in September from August at
several major U.S. ports…The U.S. economic slowdown appears to be
affecting trends in both directions, with flagging domestic
consumption stunting imports of Asian-made consumer goods as well as
Asia’s thirst for U.S. raw materials and component parts…”
November 11 – Wall Street Journal (Jilian Mincer): “As the economy
worsens, a growing number of small businesses are suspending their
401
(k) match, and, in some instances, closing the retirement plans
altogether. While only about 15% to 20% of small businesses offer a
401(k) plan, many added them in recent years to attract and retain
workers… ‘It’s a cash-flow issue,’ says Patrick M. Shelton, a partner
at Benefit Plans Plus LLC… ‘The companies don’t have money to meet
payroll and medical insurance, so they’re cutting back on 401(k)
plans.’”
November 10 – Wall Street Journal (Sarah McBride): “Mounting debt
and
a sharp drop in advertising at many of the nation’s radio
broadcasters
have led to a slashing of their valuations to fire-sale levels and
intense competition with other media for ad dollars. ‘It’s grim,’
says Farid Suleman, chief executive of Citadel Broadcasting Corp.,
owner of a radio network and more than 200 radio stations… He
describes current conditions as ‘absolutely the worst I’ve seen’”
November 11 - Bloomberg (Dawn McCarty and Anthony Effinger):
“Yellowstone Club, a private ski resort in Montana that lists
Microsoft Corp. founder Bill Gates among its members, sought
bankruptcy protection from creditors, citing a slump in real estate
prices. The club was unable to pay its creditors because of
‘decreasing revenues brought on by, among other things, economic
factors causing both difficulties in obtaining credit and declines in
the real estate market,’ according to its filing in U.S. Bankruptcy
Court… The bankruptcy shows that even the most exclusive enclaves
aren’t safe from the deteriorating U.S. real estate market. Most of
the club’s revenue came from property sales. Lots once sold for $2
million and higher.”
November 13 – Bloomberg (Jeff Wilson): “Thanksgiving dinner will be
5.6% more expensive this year, led by higher prices for turkey, pre-
cooked rolls and cranberries, the American Farm Bureau Federation
said.”
elephty
forma business reports gave a false picture of a companies value. So many
financial markets geniuses and no one stepped forward to stop the "gold
fever." Money from nothing, that is money that does not produce jobs, or
products was a house built on sand.
One explanation given for why they missed the crisis coming was the mavens
of Wall Street's faith in the system of infinite growth and ever expanding
markets. I call bullshit on that excuse. They were extracting all of the
wealth that could possibly be extracted from the system, until the
collateral was no longer there to support it.
What were the CEOs of financial firms being paid for. They are supposed to
be precient about market trends and have some knowledge of historical
cycles. Now, when the CEOs of investment firms appeared before Congress they
sing in harmony that "if I knew then what I know now, I would have done
things differently." Well, duh.
The pyramind scheme of capitalism has proven to be as ineffective a tool for
society as communism and socialism. While our economists were busy trying to
find new and interesting ways to describe how the system works, always with
the knowledge that they really did not know. Capitalism is an economic
theory not a scientific or mathematical reality.
The reason our economists thought their job was to find means to support the
current economic meme was that the rich knew that the only game in town was
to play ball for their benefit, and it did not matter what the economic
system was, because they were going to manipulate as they chose anyway
regardless of the possible negative impact on the world.
A basic problem in this scenario is the immature belief that because a
person is successful in business it makes them experts in everything else.
Look at what the "experts" have brought upon us.
Economists needed to figure out a new economic system, one that does not
allow a few wealthy and powerful individuals to prevert the system with
phony schemes and pie in the sky promises. It isn't as if there was no
precedent for this collapse. They same type of players, motivations, and
cognitive dissonance had an equally devastating effect on our nation with
the Depression. The Depression was brought on by a few wealthy individuals
who also attempted to game the system for themselves without regard for the
impact on the larger community.
They should not be able to bullshit their way out of this. Heads need to
roll. There were people who knew they were gambling with the economy. Other
nations refer to what our financial experts did as "casino capitalism." They
gambled the whole banana on a delusion that they felt they could support
with deceit. As long as the consumers and investors bought into the deceit
everything was fine, supposedly.
An student of economics for his Phd thesis went to work in the real world.
With his resume' he was hired on almost everywhere he applied except for a
few who believed he was too highly qualified to stay. He said the underlying
reality of our system is that it is based on deception. He wrote than an
entire system based on deceit is headed for a crash. Meanwhile we had
conservatives selling the idea that it is a dog eat dog world and if a
person can profit from selling people bullshit more power to them.
Honesty is considered an enemy of capitalism and is only practiced by the
naive'. The concept of honor was thought to be laughable, and the common
good a joke, because realists all know that people are only out for
themselves. Except for the fact that idea is not always true in all
situations and one certainly cannot build an economic system upon a fairy
tale or can one?
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