Did anyone hear Paulson’s pathetic speech today? He might as well have been waving the white flag! He clearly has no idea what he’s doing and he clearly had the look of flailing.
I think that we’re nearing a tipping point. Up to this point, these Wall Street talking heads have been expecting a quick V-shaped bottom to the market and another quick and painless recession. It seems to me that these people are now coming to the realization that the economy is failing. It kind of reminds me of the boy with his finger in the dike. Everytime he plugs one hole, two new leaks pop up. However, things are rapidly deteriorating and leaks are popping up everywhere. In fact, I can picture in my mind a bulging dam with water spilling over the top and a huge crack in the face spraying water. That little boy’s finger just isn’t going to stop the dam from breaking.
It all started with housing, but fixing housing can no longer fix the problem. We’ve reached a point where a sunami of entities are broke and need a bailout: housing; home builders; autos; airlines; insurance companies; credit card companies; banks; hedge funds; retailers; REITs; and even many states. In fact, Ohio just announced today that we are about to run out of money for unemployment benefits and need a government bailout. There simply is NOT enough money to bailout everyone.
Does anyone else think we are hitting a tipping point?
Mike
Mike,
I agree generally that things are worse than they appear. I’m not a proponent of “We’re headed for the next Great Depression” but I do think there is more pain coming down the line…serious recession type pain but not bread lines and widespread poverty type pain. I hope I’m right, but trying to “save” everybody and everything that make significant campaign contributions could push things over the edge. I glad the Fed cleared up that they are not buying bad loans. I’ve had absolutely no luck with short sales or REOs and I think it’s partly because the banks think this will all go away when they unload the assets on the Feds.
I also agree that this is going to take more time to bottom and I believe the bottom will be an extended flat bottom with a gradual rise…the USA is simply not the economic powerhouse it used to be. As a country, we produce little of value and have come to rely too much on a “service industry” economy that is difficult to market outside of the country.
The Ohio thing scares me a bit. I have significant cash in NJ Tax Free Money Markets (double tax free for me) and am very worried about their viability if things get significantly worse, even though they are now protected by the FDIC. I’m thinking of diversifying into multiple state MM accounts but these accounts won’t be protected by the FDIC if I switch as only the funds already invested in the account as of 9/19/2008 will be protected.
jmd_forest
Mike
dont under estimate paulson. he knows what he’s doing. I was thinking the same thing when i heard they are changing their focus to consumer lending.
Its for christmas sales. the gov needs to prop up christmas sales to give us a sense of calm. the truth is what you said were up $%&*creek without a paddle.
auto bailout is coming very soon. they need those 3-5 million worker to go out and spend money.
Its their 1-2 punch. its pretty slick move by old henry and his bazooka’s