Thursday, July 30, 2009

A Great Passbook Rate if you can get it

Intial jobless claims are up again but continuing claims are down and this is reported as good news. But we are still losing jobs so this means more peoples benifits are running out and nothing is being done about it; so expect a sharp increase in bankruptcies, foreclourses and homelessness that will become more apparent with cold weather. A new trend that is really catching on is for cities to pay the homeless to get out of town. How many buses will Greyhound need to house all the homeless? It’s starting to look like the early thirties when the empty train cars going in both directions would be full of men going to the next town to look for work.

Corporate profits are up but it’s almost entirely from cost cutting. Cost cutting doesn’t make money, cost cutting costs money. When the next quarter numbers come out in early October the picture will be completedly different. The big banks are showing huge profits but not because they are lending more money, it’s still impossible to get a loan. It’s not because defaults from business loans are down, write downs are way up. They’re not making money from foreclosing on more and more families.

They are making money by borrowing trillions from the Federal Reserve (that they printed, backed by thin air) The banks borrow at zero interest and then put it on deposit with the Fed at 6%. (Does your passbook pay 6% or even .6%) The Fed has about a trillion of this money as reserves but they are also buying US Treasury Bonds because nobody else will buy them at the current interest rate. Nobody knows how high interest rates would have to go before anybody would buy them. (this is where the chills run down your spine) Or if anybody would buy them.

The US GDP report comes out tomorrow; don’t expect any good news. Try to think of something funny to say, I can’t.

1 comments:

Anonymous said...

The problem is that we have had a change in the way we view things..."profit" even if it isn't a real profit and just game playing calling loans or funds from the government profit is important so you can give yourself a bonus.

As they are tearing the country apart they think we are stupid for not being smart enough (and dishonest enough) to play these games. I guess if you think you can steal enough and keep it safe you might be able to keep you and your family safe for a generation or two but I tend to think only a handful of old money families that have been stealing for years (like a family that last name starts with a "B") will have enough to survive the way they think they will. All but a handful of Americans are wage slaves but some of us think we aren't wage slaves since our wages are bigger.

Thinking that the problem is over is ignoring the real problems and just thinking about the Wall Street games and thinking that the games they play and the money they play with is real.

Seems funny that the games these people play would not work for you and I or the small business on Main Street (the ones that do want help with health care, not the ones that don't want any of that kind of stuff)...if you have or steal enough money the rules are different.