How Did The Economy Collapse?

In 2007, the economy was robust and the stock market in a bull run. 12 months later, the stock market went into a tailspin, credit market froze, and unemployment surges.

The Onion has a superb illustration...

Bunning Grills Ben Bernanke To A Crisp

I have a feeling this grilling is only a sideshow. The money printing is going to continue until it cannot, ie. the US dollar becomes worthless.

The US dollar still retains a modicum of dignity because most fiat currencies are on the slide too, but when compared to gold, the US dollar is shedding its value fast.

I believe most Americans realize the country is on a self-defeating and unsustainable path. There will come a time when funny money created by the Federal Reserve no longer boost the economy and creditors start asking for debt repayments.

Fiscal fraud has helped the rich get richer, at the expense of taxpayers. If the Federal Reserve collapses tomorrow, it is going to make Bernard Madoff looks like a choirboy.

What Is Left Unsaid During Obama's China Tour

When you are indebted to others, especially your strategic but at times dangerous competitor, it is rather hard to make a stand on critical issues concerning Americans.

The prudent way is to get the budget in order and strive to reduce the federal debts which have exceeded $12 trillion dollars.

US debts is now close to the statutory limit but Congress will ultimately adjust the ceiling and not send the US government into crisis.

Everything will be fine. However, the kindness of strangers is less predictable.

When it is taken away at an inopportune time, Americans could suffer terribly as the US government either borrow at sky-high interest rates or when nobody wants to lend, then the important civil services have to shut down.

Cash For Clunkers Withdrawal

Is this what happens to consumers when Cash For Clunkers program is withdrawn?

But don't worry, there could be another round if the economy goes into a double dip recession.

Recession Likely To Be Over?

Ben Bernanke said the economy likely is growing now, but he warned that won’t be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising.

“From a technical perspective, the recession is very likely over at this point,” Bernanke said in responding to questions at the Brookings Institution. “It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was.”

Source: MSNBC

Has Ben Bernanke jumped the gun in declaring the recession is likely over? I think it is callous for Bernanke to make such a statement when 9 million people are still underemployed.

Will the underemployed be able to secure new job soon that will utilize their expensive education and core skill sets? Will the cash registers of retailers start ringing tomorrow now that the outlook is "brighter?"

Don't bet on it...

Is The Economy Out Of The Woods?

From the multitude of economic reports, it seems the economy is stabilizing and we are finally out of the woods. Well, let's hope we don't go from here and drop into the abysss later on.

A Tale Of Two Cows In Different Corporations

DEMOCRAT

You have two cows.
Your neighbor has none.
You feel guilty for being successful.
Barbara Streisand sings for you.

REPUBLICAN

You have two cows.
Your neighbor has none.
So?

SOCIALIST

You have two cows.
The government takes one and gives it to your neighbor.
You form a cooperative to tell him how to manage his cow.

COMMUNIST

You have two cows.
The government seizes both and provides you with milk.
You wait in line for hours to get it.
It is expensive and sour.

CAPITALISM, AMERICAN STYLE

You have two cows.
You sell one, buy a bull, and build a herd of cows.

BUREAUCRACY, AMERICAN STYLE

You have two cows.
Under the new farm program the government pays you to shoot one, milk the other, and then pours the milk down the drain.

AMERICAN CORPORATION

You have two cows.
You sell one, lease it back to yourself and do an IPO on the 2nd one.
You force the two cows to produce the milk of four cows. You are surprised when one cow drops dead. You spin an announcement to the analysts stating you have downsized and are reducing expenses.
Your stock goes up.

FRENCH CORPORATION

You have two cows.
You go on strike because you want three cows.
You go to lunch and drink wine.
Life is good.

JAPANESE CORPORATION

You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
They learn to travel on unbelievably crowded trains.
Most are at the top of their class at cow school.

GERMAN CORPORATION

You have two cows.
You engineer them so they are all blond, drink lots of beer, give excellent quality milk, and run a hundred miles an hour.
Unfortunately they also demand 13 weeks of vacation per year.

ITALIAN CORPORATION

You have two cows but you don't know where they are.
While ambling around, you see a beautiful woman.
You break for lunch.
Life is good.

RUSSIAN CORPORATION

You have two cows.
You have some vodka.
You count them and learn you have five cows.
You have some more vodka.
You count them again and learn you have 42 cows.
The Mafia shows up and takes over however many cows you really have.

TALIBAN CORPORATION

You have all the cows in Afghanistan, which are two.
You don't milk them because you cannot touch any creature's private parts.
You get a $40 million grant from the US government to find alternatives to milk production but use the money to buy weapons.

IRAQI CORPORATION

You have two cows.
They go into hiding.
They send radio tapes of their mooing.

POLISH CORPORATION

You have two bulls.
Employees are regularly maimed and killed attempting to milk them.

BELGIAN CORPORATION

You have one cow.
The cow is schizophrenic.
Sometimes the cow thinks he's French, other times he's Flemish.
The Flemish cow won't share with the French cow.
The French cow wants control of the Flemish cow's milk.
The cow asks permission to be cut in half.
The cow dies happy.

FLORIDA CORPORATION

You have a black cow and a brown cow.
Everyone votes for the best looking one.
Some of the people who actually like the brown one best accidentally vote for the black one.
Some people vote for both.
Some people vote for neither.
Some people can't figure out how to vote at all.
Finally, a bunch of guys from out-of-state tell you which one you think is the best-looking cow.

CALIFORNIA CORPORATION

You have millions of cows.
They make real California cheese.
Only five speak English.
Most are undocumented.
Arnold likes the ones with the big udders.

Hat tip: James

Are You Stunned By Bloody Job-Loss Monday?

Looking at the news, I am really stunned that over 70000 jobs are lost in a single day... worldwide of course. If this is in America alone, we are really headed for the second Great Depression.


In any case, the numbers are shocking and I am beginning to worry that I could be retrenched too. If that happens, that could spell trouble for our family finances. We do have about 3 months reserve in savings but in this economic climate, jobs are not easy to come by and the disruption to my income could stretch for months.

I am motivated to cut down further on my family budget to accumulate more reserves for rainy days ahead. In fact, it is not only raining cats and dogs, it is a thunderstorm out there. I won't be giving up on my blog monetization but neither am I placing much hope on it. So far, I have earned only pennies. .

Meanwhile, I have been helping my wife to hunt for jobs too. Recently, she found a part-time job giving tuition for juniors. The money is not great, but it helps to tide us over.

How are you guys coping with the economic recession? Any tips to share?

Hard To Find Any Cheer On Black Friday

So how are sales for this year's Black Friday coming along? Not too good, if the below news are anything to go by.

…but for many stores there will be little to nothing to cheer about (For stores, the holiday season may already be over; AP).

There may be a lot of traffic to stores but it is not the quantity that matters but rather the quality (Black Friday shoppers out in force, but cautious; AP).

Sure, shoppers will be out in big numbers, it is Christmas chopping season and even though the majority will cut their overall spending they don’t wish to give up the experience.

New York City has strengthened security at its subway system amid warnings of a potential terror threat during the holiday season (Feds warn of terror plotting against NYC subways; AP).
Well, Carl Icahn started his holiday shopping spree early and boosted his Yahoo stake by 6.8 Million shares to 75.6 Million or roughly 5.5% (Carl Icahn raises his stake in Yahoo; AP).

Icahn is not the only one who packed goodies in his bag as the British government took a 60% stake in RBS, the countries second largest bank (RBS to be taken over by British government; AP).

It is clear the Icahn’s Christmas list was focused on assets while the British government loaded up on liabilities.