volatile
Scholar and a Gentleman
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Obama is lying again!
- Thread starter BeAChooser
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Meadmaker
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One thing that makes this recession different than previous recessions is that in previous recessions, the Secretary of the Treasury didn't go to Congress and say that he needed 700 billion dollars next week, or the whole darned economy will fall off a cliff.
I'm guessing he did that because things were very, very, bad.
Of course, BeAChooser might wish to argue that really, things weren't all that bad, and that Paulson and Bush were simply conspring to find a way to give tax money to their friends in the banking industry. If he wants to do that, I'm certainly willing to listen, but I haven't seen any real evidence of that, myself. I think a more straightforward explanation is that things really and truly were pretty massively screwed up.
I'm guessing he did that because things were very, very, bad.
Of course, BeAChooser might wish to argue that really, things weren't all that bad, and that Paulson and Bush were simply conspring to find a way to give tax money to their friends in the banking industry. If he wants to do that, I'm certainly willing to listen, but I haven't seen any real evidence of that, myself. I think a more straightforward explanation is that things really and truly were pretty massively screwed up.
How many ways is this dishonest? Let's see:
1) It shows absolute job losses, rather than unemployment rate. The U.S. labor force is a lot bigger now than in prior recessions. An increase of 1% in the unemployent rate in 2009 will have far more job losses than an increase in the unemployment rate in 1990 or 1981.
And speaking of 1981...
2) Where are the job loss numbers for the 1981—1982 recession, which was by far the most serious of recent recessions (see the OP)?
Does Speaker Pelosi represent an agricultural congressional district? Because this is cherry-picking at its dishonest finest.
roger
Penultimate Amazing
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Obama said this is the worst economic crisis, not the worst recession. Showing recession numbers to counter his claim is pointless.
"This is the best strawberry ice cream ever!"
"Liar!!! Here's taste test data, FooFoo is the best chocolate brand!"
"WTF?"
We have a crisis. There is hardly any credit available. Commercial paper isn't being bought. Huge banks have failed. Our entire auto industry is near the collapse point. We were at the point where we could have seized up the global economy. Mom and pop businesses are unable to get revolving loans, their lifeblood, and are failing through no fault of their own. It's a big, scary crisis. Job numbers, inflation numbers, GDP numbers - the numbers of recession - don't measure the crisis. Oh, they'll eventually reflect it. If GM, Ford, and Crysler all fail then we'll have a lot more unemployment, but the numbers today do not measure the risks we face.
Greenspan called it "once-in-a-century credit tsunami" and "a critical pillar to market competition and free markets did break down." So add him to your "liars". I can provide dozens more quotes like that from economists, republicans, and the like, but you have google too.
"This is the best strawberry ice cream ever!"
"Liar!!! Here's taste test data, FooFoo is the best chocolate brand!"
"WTF?"
We have a crisis. There is hardly any credit available. Commercial paper isn't being bought. Huge banks have failed. Our entire auto industry is near the collapse point. We were at the point where we could have seized up the global economy. Mom and pop businesses are unable to get revolving loans, their lifeblood, and are failing through no fault of their own. It's a big, scary crisis. Job numbers, inflation numbers, GDP numbers - the numbers of recession - don't measure the crisis. Oh, they'll eventually reflect it. If GM, Ford, and Crysler all fail then we'll have a lot more unemployment, but the numbers today do not measure the risks we face.
Greenspan called it "once-in-a-century credit tsunami" and "a critical pillar to market competition and free markets did break down." So add him to your "liars". I can provide dozens more quotes like that from economists, republicans, and the like, but you have google too.
I don't believe this, based on the following:
1) A couple of weeks ago, I was waiting for a Southwest Airlines flight. At the gate area was a kiosk, with a very large poster on it urging me (and everyone else who saw it) to get a Southwest Airlines Visa card. If you signed up, you'd get all kinds of Southwest frequent flyer miles. A guy was standing at the kiosk, doing a carney hawker's pitch for the Southwest Visa card, offering baseball caps if you signed up.
Yes, in this supposedly credit-seized economy, Visa was bribing total strangers to sign up for one of their credit cards.
2) The other night, Mrs. BPSCG and I went to Blockbuster and rented one of my favorite movies, Time Bandits.
As it happens, I'm wearing those same pants today, and here's what that receipt says:
Get A $50 CITI GIFT CARD TO USE AT BLOCKBUSTER(R) OR ANYWHERE!
Get the credit card that gives you fun rewards fast - the Citi PremierPass(R) Card.
- Earn points toward fun rewards like movies, travel & electronics
- Your first reward: a $50 Citi Gift Card you can use at BLOCKBUSTER or anywhere (available after a qualifying purchase.)
- No annual fee
Call 1-800-311-5773 by 3/31/09 for this special offer.
If nobody's lending money any more, then whence all these come-ons for credit cards?
volatile
Scholar and a Gentleman
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Fair enough.
roger
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Surely you recognize the difference between personal credit being offered to stimulate sales or fees, and the credit that is being offered that I talked about - commercial paper, business loans, etc. Read the WSJ - it's full of stories about this. It's far to credible for me to have to justify it blow by blow on a forum. Large banks - Citigroup, Bank of America, are receiving handouts. Banks are being criticized for, after receiving a bailout, stuffing it in their coffers rather than lend the money. Iceland was on the brink of bankrupcy until they were able to negotiate with their creditor, and their Government basically toppled.
I shouldn't have to do this, it's so well documented, but just a few links of the most reputable newspapers and news sources in the world:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.sBpvTRPbhU
(feb 10 - $1.6T in credit being cut back)
http://www.ft.com/indepth/credit-crunch-conversations
http://www.thedeal.com/dealscape/crisisonwallstreet.php
http://www.ft.com/indepth/global-financial-crisis
http://www.ft.com/iceland
http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/
http://www.reuters.com/news/globalcoverage/creditcrisis
http://www.bloomberg.com/apps/news?pid=20601116&sid=a43Qh4.89P1w&refer=africa
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aBvuO8cVLtwU
http://www.bloomberg.com/apps/news?pid=20601085&sid=apsI1pqWFA3Y&refer=europe
http://www.bloomberg.com/apps/news?pid=20601070&sid=aGq2B3XeGKok&refer=home
That's an incredibly brief sample, I could give you 100 links just written today, 100 from yesterday, etc. It's one of the best documented phenomenons in the world.
But hey, you got a credit card offer, you think that invalidates or raises even the tiny bit of double about all of this? Come on, I've met you, you are more reasonable than this.
rwguinn
Penultimate Amazing
Didn't we just give the banks some 800+ billion dollars to knock that **** off?
Where did it go?
roger
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Perhaps you don't understand this, so I will elaborate.
Companies like Visa make money from card fees, and with promotional acts like they do with BlockBuster. Blockbuster is trying to get people to rent movies, sales are one method, offering credit is another. All of this is balanced against all the news coming out about how credit card defaults are shooting up alarmingly. One can assume that Visa will be using rather heightened criteria for lending.
In contrast, revolving loans for business are coming from banks. The first story I linked goes into this in great detail. But, basically, businesses negotiate a line of credit that they can draw against. It's typically for short term stuff to ease the flow of business - make payroll friday because we aren't getting paid for that big contract until the end of the month, order new supplies to start a new product line, that sort of thing. Just about any business of consequence has something like this set up, and they only draw on a portion of the credit, because they negoiated for worst case scenerios. So, in typical times, a bank might expect 20% of that credit (I completely made that number up) to be drawn.
But now, everyone is in a worse case scenerio. Revenues are down, and companies are drawing on their credit lines to just survive, hoping that sales will pick up and they will be able to pay the credit down in the future. In the meantime, they need to either make payroll, or lay people off. Laying people off can destroy the company just as effectively, so it's not a hard decision for many scenerios - you draw down on your revolver.
Ordinarily, banks can withstand that sort of thing, because it only happens to the occasional business. But now tons of businesses are drawing down on them, there is extreme fear that the companies that haven't done so will do so. The bank can quickly become insolvent, and thus fail, in that environment. So they are retracting this credit. A lot of stock prices of perfectly good businesses are falling to the floor not because people are stupid, but there is a real risk the banks will change the credit situation, forcing the company into bankrupcy.
Normally a bank facing an issue like this will just borrow from another bank, but this is a global phenomenon. I've linked Iceland, you can read about UK banks, Russian banks, etc., on your own dime (google search). They are all facing the same thing, or worse, and are not in the position to lend when they are facing their own crisis.
This has rippled into Wall Street. (ripple is such an understatement). Companies are trading for pennies on the dollar, and are ripe for takeovers. But, no one can get money to perform the takeovers, so the extremely low prices persist. A big fear of stockholders like myself is that somebody will get deal money before prices rebound, and our companies will be taken over for far below the fair price. As one example, I offer you the story about Buffett offering to buy Constellation. He made them an offer they couldn't refuse - way below the fair price, but they needed money. I got burned recently with an energy company that I owned - I bought at a low price, it dropped some more, and a company that actually had some cash came in with a hostile bid. There's a huge fight going on over it right now. It was one of the few cases where I bought LEAPS instead of stocks, and I basically got burned out of all my money. Lesson learned there.
None of this means there is no money at all. These institutions make money from credit, after all, so they have to lend if they want income. If you have great credit you can get a mortgage, a new credit card. Retailers are between a rock and a hard place - extend credit to get inventory moving, vs the risk the credit will never be paid back. Still, this sort of thing is being done.
This is a huge, huge, huge problem. Is there light at the end of tunnel? Sure. Are we more liquid than in October? Probably. Is it still a crisis? Absolutely! Is it a bigger problem (problem, not recession) than the 70s or 80s? Yes. Yes. Yes. The recession is just another annoyance tacked on top of all these other problems.
roger
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I think the first link describes it pretty well. Banks aren't making money. They are trying to survive. As my last post explains, banks face unknowable massive draw downs at any moment. They are playing defense.
Against that, of course, is the fact we are giving them our money. There's tons of articles out there about tightening the requirements for the bailouts because of the understandable outrage about this. But against that is the very real problems the banks face - you can't legislate insolvency away. "You must give all this money away". "Okay, but the next credit draw down means we are bankrupt because we have no money in the coffers". Congress can't change the laws of physics, and they can't change the immutable laws of finance.
JoeTheJuggler
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So, to sum up, if Obama had said, "This is the worst unemployment rate our country has experienced since the Great Depression" or "This is the worst inflation our country has experienced since the Great Depressino" he would have been lying.
He didn't say that, so evidence that those statements are lies is irrelevant to that claim that Obama is lying.
He didn't say that, so evidence that those statements are lies is irrelevant to that claim that Obama is lying.
Very nice explanation. Thanks.
Dragon-Master
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Gee i do not know...World War 2 maybe? What a concept silly socialist.
And to call this a stimulus bill is dishonest and a lie. Its is the largest Ponzi Scheme ever.....
Dragon-Master
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Is that why we took out a loan a month or so ago? Yes SOME banks are being stingy, but to equate all of them, is dishonest.
Alt+F4
diabolical globalist
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You are a newbie if you're calling me a socialist.
World War II was the biggest stimulus package ever. Billions of government dollars poured in the economy and close to full employment. It seems destroying bridges can be as good for the economy as building new ones.
roger
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lovely.
I did not equate all banks, I specifically drew distinctions between banks. I provided copious documentation on the particulars. Shall I call you a liar, dishonest, or merely mistaken?
JoeTheJuggler
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Not quite a lie would mean. . ..?
I think it was a reference to our deteriorating infrastructure in general:
http://www.asce.org/reportcard/2009/
And perhaps an indirect reference to the collapse of the I35W Bridge in Minneapolis in August of 2007.
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