This is the look of a man with many questions, and not many answers! As we leave 2007, and move forward towards 2008 its easy to have a lot of questions...considering what we have witnessed over the last few months...
Its clear now that the Sub-prime mortgage debacle was not confined...hell it was never confined from the start...not a day goes by that you do not read about another large bank or investment bank getting cash infusions from either the FED or some foreign entity...and the question of solvency rather than liquidity keeps getting asked abroad...Central Banks worldwide seem to feel as if flooding the markets with cash will "get us out of this one", but watching telltale signs in the LIBOR and other key indicators these infusions would seem to be far to little far to late...the banks have money...they are just afraid to let go of it...even to each other...because what they may have to take as collateral may be worthless...and until there is some degree of "transparency" about the value of the collateral things may not change...
We live in a world where "perception" is everything...and although the figures coming out of this and that government agency every month are spinned as positive somehow if you are an average American you just can't make that jive with the price of gasoline at the pump or the tape at the grocery store...those two measures of what it cost you to live don't lie, and can't be argued with...
Today we hear that ex Prime Minister Bhutto was assassinated last night after giving a speech, this was a tragedy waiting to happen...but sad none the less...and the incident will surely cause instability in an area that needs no more instability...
I could go on and on...the headlines all tell the story if you take the time to read them...and don't bet the farm on it all turning out OK...and the way things look right now all we can really do is to try and do whatever we can individually to lessen the pain down the line...
Some would say this to pessimistic an outlook...OK fine...maybe it is...but its way more realistic than the crap the pump monkeys will feed you on TV...I have lived overseas for extended periods of time...I have seen first hand how things can spiral out of control overnight...I was a young man in the oil embargo of the early 70's (during the days of gas rationing), and a newlywed during the Carter years...not looking forward to going back to anything remotely akin to either of those times...but we are headed that direction...history always repeats itself...
For now I will leave you with a quote from the book, The Great Reckoning:
"There is, to be sure, a singularity about 1929-33, when the lessons of the past were deliberately ignored. The wise advice of Andrew Mellon, Secretary to the Treasury, that the policy should be to liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate" and so "purge the rottenness from the economy"-in other words, let recession rip-was disregarded. First Herbert Hoover, then Franklin Roosevelt tinkered with the economy, and so prolonged the sickness. On the other hand, the kind of stock-market malpractices which allowed the build-up to 1929 were outlawed. We have learned a good deal more since, especially from the crises of 1973-74 and 1987. All these convulsions can be studied and the danger signals they exhibit extrapolated and put to use. That is why, when I lecture to senior executives in various parts of the world, I always tell them: "Do not bother with economics. You will learn nothing from it. Read economic history, and think about it."
Heed these words.....history does repeat itself, since human nature is pretty much the same over the ages...
2008 could turn out to be one of the most important years in our nations history...and by extension the world...it bears watching! CLOSELY!~
Its clear now that the Sub-prime mortgage debacle was not confined...hell it was never confined from the start...not a day goes by that you do not read about another large bank or investment bank getting cash infusions from either the FED or some foreign entity...and the question of solvency rather than liquidity keeps getting asked abroad...Central Banks worldwide seem to feel as if flooding the markets with cash will "get us out of this one", but watching telltale signs in the LIBOR and other key indicators these infusions would seem to be far to little far to late...the banks have money...they are just afraid to let go of it...even to each other...because what they may have to take as collateral may be worthless...and until there is some degree of "transparency" about the value of the collateral things may not change...
We live in a world where "perception" is everything...and although the figures coming out of this and that government agency every month are spinned as positive somehow if you are an average American you just can't make that jive with the price of gasoline at the pump or the tape at the grocery store...those two measures of what it cost you to live don't lie, and can't be argued with...
Today we hear that ex Prime Minister Bhutto was assassinated last night after giving a speech, this was a tragedy waiting to happen...but sad none the less...and the incident will surely cause instability in an area that needs no more instability...
I could go on and on...the headlines all tell the story if you take the time to read them...and don't bet the farm on it all turning out OK...and the way things look right now all we can really do is to try and do whatever we can individually to lessen the pain down the line...
Some would say this to pessimistic an outlook...OK fine...maybe it is...but its way more realistic than the crap the pump monkeys will feed you on TV...I have lived overseas for extended periods of time...I have seen first hand how things can spiral out of control overnight...I was a young man in the oil embargo of the early 70's (during the days of gas rationing), and a newlywed during the Carter years...not looking forward to going back to anything remotely akin to either of those times...but we are headed that direction...history always repeats itself...
For now I will leave you with a quote from the book, The Great Reckoning:
"There is, to be sure, a singularity about 1929-33, when the lessons of the past were deliberately ignored. The wise advice of Andrew Mellon, Secretary to the Treasury, that the policy should be to liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate" and so "purge the rottenness from the economy"-in other words, let recession rip-was disregarded. First Herbert Hoover, then Franklin Roosevelt tinkered with the economy, and so prolonged the sickness. On the other hand, the kind of stock-market malpractices which allowed the build-up to 1929 were outlawed. We have learned a good deal more since, especially from the crises of 1973-74 and 1987. All these convulsions can be studied and the danger signals they exhibit extrapolated and put to use. That is why, when I lecture to senior executives in various parts of the world, I always tell them: "Do not bother with economics. You will learn nothing from it. Read economic history, and think about it."
Heed these words.....history does repeat itself, since human nature is pretty much the same over the ages...
2008 could turn out to be one of the most important years in our nations history...and by extension the world...it bears watching! CLOSELY!~
