On Sun, 02 Nov 2008 02:12:08 -0500, Wes wrote:

"Ed Huntress" wrote:


Of course, they then have no depositors. This is a kind of equilibrium,
because they don't have many borrowers, either. g In Japan in the early
'90s, banks dropped their loan rates to 0% interest (with some government
help, of course) and they still couldn't give out loans. There was no growth
in the economy and nobody wanted their stinking money.


Now iirc, Japan was suffering from overstated property values. IOW, they had the same
bubble we are in currently. I hope you are not telling me that if there is an unreality
in the market we need to keep that unreality going.

I see what is happening as a correction. Yes, it may not be pretty but we can't keep a
sham going forever and our chickens have come home to roost.

I think you made a good case that we are screwed and that is the framework I'm working
with. Hunker down, reduce expenses, smile at the bosses and hang on to the job as long as
I can. If I loose the job, start immediately looking for a new one because 52 weeks of
unemployment isn't going to last as long as the downturn.

Recently my plant laid off permanently 16 people, that is something that the plant has
never done, corporate management is sure that for the foreseeable future those jobs are
gone and a temporary layoff would have given those people false hope.

Getting back to my original point, the growth model isn't working. This isn't an empty
country with huge resources to exploit. The export market isn't as big as it once was. We
need to figure out how to live within the reality that the growth model is getting just as
tapped out as the oil patch.


Wes
===================
IMNSHO the problem is a proliferation of "zombie" financial
organizations [and per several other threads almost all major
American corporations when the sources of their incomes are now
financial organizations that do something else on the side].

Japan had and still has this problem. We [the US] are rapidly
creating huge numbers of corporate "living dead." This appears
to be the result of the refusal to admit failure and move on.

Just a suggestion -- if a "for profit" corporation domiciled in
the US has more than 10 million $US in claimed assets [not equity
-- assets], or employs more than 1,000 people, but fails to
generate any US taxable income for 5 consecutive years, they
should be placed in involuntary chapter 11 [reorganization] with
3 more years to either become profitable [i.e. paying taxes] or
go into chapter 7 [liquidation]

This would have "solved" the Detroit automaker problem.