John R. Carroll wrote:
"F. George McDuffee" wrote in message
...

On Tue, 14 Oct 2008 09:15:25 -0700, "John R. Carroll"
wrote:


Not this time George. I think what is happening is a refusal to admit that
their version of free markets doesn't work as advertised and never did.
That's called denial.

It's called "short selling."

They are especially trying to deny that a strong economy relies on an
upwardly mobile, prosperous, middle class and a reasonable gap between
the
upper and middle class as far as income goes.

One example is how Boeing is attempting to reduce their costs for
US engineers [while at the same time complaining that no one
wants to be an engineer any more and work 80 hours a week..]
===========
snip


Boeing's commitment to offshore manufacturing is a necessary part of their
sales strategy George.
In order to secure Asian orders, for example, Boeing agreed to put
manufacturing jobs in Asia.

As far as contributing to the American work force, Airbus puts more work in
US shops for civilian airframe parts as a percentage of sales and those jobs
pay top dollar. I've got a dozen large parts in the A380 alone and they are
fabbed right here in California.
This globalization thing works both ways but the mechanics are fairly
industry and country specific.

Were Boeing not to have agreed to build a fixed volume of their stuff in
China, the Chinese would have selected Airbus for their fleet.
The number of US jobs directly attributable to Boeing would then have been
exactly zero.
The metric of choice in civil aviation doesn't involve Boeing at all, It's
the heatlth of the operators that's important and they are very sick and
have been for years. Another instance where opaque deregulation has lead to
failure of an industry.


JC




I was with you all the way up to the end, but I disagree with the last
sentence.

Deregulation? Of civil aviation?

No, the failure of that particular industry is entirely due to the legal
industry.




--

Richard

(remove the X to email)

On Wed, 15 Oct 2008 14:20:07 -0500, Ignoramus17346
wrote:

On 2008-10-15, F George McDuffee wrote:
OT: this thread seems a good place to insert this piece of
information.

Hi George... Have you given this a thought: just what is the limit of
the ability of the Federal government to support failing banks and
firms?

Let's say, for example, that house prices fall by 15 more percent.
That would, surely, put a lot more mortgages underwater and further
reduce the banks' capitals. Would the Federal government still be able to
prop up the banks?

Or, let's say that foreign investors decide not to buy as many
Treasuries as they used to. (or would insist on loans to be
denominated in non-US currency) That would raise borrowing costs for
everyone, including the Federal government, and add roughly 100
billion per year of debt servicing costs for the US government debt,
for every percentage point of interest rates.

I have a feeling, which I cannot yet quantify, that the staggering
amounts of money being used to plug up the dikes, may not be too far
from the maximum that the government could spend/print without the
currency free fall.

So, making a hypothetical logical leap, let's assume for a minute that
the losses exceed what the Federal government can finance. Then what?
We have a government that just spent trillions, cannot any more effect
any positive changes, and the crisis would continue but with the
government's hands already tied.

i
=========
When you are a sovereign country, you never go broke. Just like
the bank in a game of Monopoly you can always print more money.
Thus the government bonds and other obligations [denominated in
the domestic currency] can and will be paid to the last cent. No
one will lose a penny.

[Technically you don't need to waste the paper and ink. Through
a process of "monetizing the debt," the FRB can create and inject
as much "liquidity" as required/desired in the form of 1s and 0s
in their computer systems. The scam is that the FRB buys
treasury securities using FRB "notes", and through the magic of
fractional banking then issues up to 10X of the notational value
of the treasury securities in new Federal Reserve notes. Every
cycle through the magic money machine generates 9X "new money.,"
with 1X used to buy another batch of T-bills.]

Now whether this "money" is worth anything is a separate
question.

The Case-Shiller residential housing index followed a very
smooth and predictable path indicating the "natural" or normal
growth in the "value" of housing. When the housing bubble was
inflating, the actual housing prices grew far faster and far
above the Case-Shiller projections, although there were some
*SLIGHT* offsetting factors such as an increase in floor areas
and furnishing [i.e. granite counter tops], although IMNSHO most
of this was an increase in cost *NOT* value.
http://en.wikipedia.org/wiki/Case-Shiller_index
http://www2.standardandpoors.com/por...0,0,0,0,0.html

Because the housing bubble was not uniform across the country,
the house costs v the Case-Shiller index projection are different
in different areas, but in many of the bubble areas such as
Miami, Las Vegas, and most areas of California, the "ask" prices
are still 30 to 50% above the C-S "norms," and when the house
prices are pro rata adjusted to the CS, 50% or more of the "new"
mortgages are upside down [the mortgage is more, sometimes much
more, than the projected value of the house.] FWIW -- this
indicates that the "mark to market" accounting valuation of the
"toxic" CDOs and other derivatives is largely correct, i.e. they
are worth nil, nada, zip, zilch, zero.

As John C. observed, if you are running a consumer
society/economy, it is poor public policy to bankrupt the
consumer. Leaving all ethics aside, if you are a parasite, and
kill your host, you die too.

I posted this earlier in another thread, from information
available in many of the most important MSAs [metropolitan
statistical areas] a family would have to be in the top 20% [8th
and 9th] income deciles to afford even the median price home
under the max home price = 2_1/2 X annual family income rule.

With the proliferation of other debt such as credit card, auto
loan, and student loan, the 2_1/2 X is most likely still too high
and 2 X would be more reasonable. [Note this is family/household
and not individual income.] In 2006 and early 2007 in the Los
Angeles MSA, the median [1/2 above, 1/2 below] home sold for 10X
the median family [1/2 above, 1/2 below] income.
[in the following be sure to note if average or median]
http://www.creditcards.com/
http://www.marke****ch.com/news/story/new-credit-card-behavior-study/story.aspx?guid={2EAF46D7-53E7-460E-AE05-02AF4D22D3A9}&dist=hppr
http://www.creditslips.org/creditsli...m-weston-.html
======
snip
Instead of the $9,300 figure, Pulliam Weston cites statistics
from the Federal Reserve's 2004 Survey of Consumer Finance that,
for persons who carried a credit card balance, the median amount
owed was $2,200. Half would owe more than the median, and half
would owe less than the median--that is what a median is. Her
point is that U.S. households are not as desperately in credit
card debt across the board as the CreditCards.com statistics
would have you believe, but she also emphasizes that a sizeable
number of U.S. households are in dire financial straits. My
problem is that I can get the numbers from the Fed's Survey of
Consumer Finance to jibe with other consumer credit figures it
releases.
snip
-----------------

To cut to the chase, your question seems to be can the US and
other governments get this credit contraction under control?
Yes, they can.

The next question is will they do so? IMNOSHO not the way they
are going about it. Grandma knew "sending good money after bad"
is never the way to correct a problem.

For example, it is apparent that "derivatives" of various kinds
are the cause of much of the problems. It has been over a year
since the regulatory agencies and politicians start to whine,
moan, and complain about this, with absolutely no action.
Grossly excessive CEO and other officer/director
pay/benefits/perks have been contentious for years with no
action. Grossly excessive leverage and other financial
"engineering" is a clear contributing factor but the solution is
to repeal Sarbanes-Oxley and eliminate mark-to-market.
Traditional mortgage underwriting standards such as the 2_1/2 X
annual household income *MAXIMUM* house price limit have been
systematically evaded.

Just as you must generally wait until an addict or alcoholic
"hits bottom" before you can have a successful intervention, [and
even then a major of interventions are not successful, the addict
still dies after one last "fix," and the drunk dies after one
last drink] the politicians and financiers are not yet hurting
enough (if at all) for any meaningful and sustainable change to
occur. Just why would they not repeat their actions as soon as
they get the chance. For example
--------
Oct. 15 (Bloomberg) -- Goldman Sachs Group Inc.'s Lloyd
Blankfein, whose $70.3 million paycheck made him Wall Street's
most highly compensated chief executive officer last year, could
still earn tens of millions annually under the bank-rescue plan
run by his former boss, Treasury Secretary Henry Paulson.
snip
-------
for complete article click on
http://www.bloomberg.com/apps/news?p...KUs&refer=home


FWIW the DJIA is now down 733, back to 8578 [15 Oct 08] showing
the very transitory effects of operationally infinite [the market
can't take it any faster] "money" injections.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

John R. Carroll wrote:

"cavelamb himself" wrote in message
m...

John R. Carroll wrote:

"F. George McDuffee" wrote in message
...


On Tue, 14 Oct 2008 09:15:25 -0700, "John R. Carroll"
wrote:



Not this time George. I think what is happening is a refusal to admit
that
their version of free markets doesn't work as advertised and never did.
That's called denial.

It's called "short selling."


They are especially trying to deny that a strong economy relies on an
upwardly mobile, prosperous, middle class and a reasonable gap between
the
upper and middle class as far as income goes.

One example is how Boeing is attempting to reduce their costs for
US engineers [while at the same time complaining that no one
wants to be an engineer any more and work 80 hours a week..]
===========
snip

The metric of choice in civil aviation doesn't involve Boeing at all,
It's the heatlth of the operators that's important and they are very sick
and have been for years. Another instance where opaque deregulation has
lead to failure of an industry.


JC


I was with you all the way up to the end, but I disagree with the last
sentence.

Deregulation? Of civil aviation?


Yes.
Have you looked at the shenanigans surrounding ticket pricing?
Fairs used to be regulated in a way that kept them high enough to cover
costs.
Fair wars aren't good for the airlines or, in the long run, passengers.


No, the failure of that particular industry is entirely due to the legal
industry.


How's that?
Rate deregulaion lead to maintenance practices that were criminal fraud.
Is that what you mean?

JC



Sorry, to my mind civil aviation doesn't include the airlines, but in
reality it does,

The term I use is General Aviation, which inclued airlines and the
little guys (civil).

It maay not be that way, but that's what I was thinking.

Sorry (again)



--

Richard

(remove the X to email)

"cavelamb himself" wrote in message
m...
John R. Carroll wrote:

"cavelamb himself" wrote in message
m...

John R. Carroll wrote:

"F. George McDuffee" wrote in message
m...


On Tue, 14 Oct 2008 09:15:25 -0700, "John R. Carroll"
wrote:





Sorry, to my mind civil aviation doesn't include the airlines, but in
reality it does,

The term I use is General Aviation, which inclued airlines and the little
guys (civil).

It maay not be that way, but that's what I was thinking.

I believe you are correct but I don't make the distinction.
You were referring to million dollar 172 Cessna's and then Cessna getting
out of the private aviation business for a while.
That, and what has happened in the business and private market are pretty
interesting.
Most builders are now Canadian Corporations. There are notable exceptions
but they are few.
Bombardier now owns several well known brands and they are Canadian.
OTOH, there is Hawker/Beechcraft and I believe they are American. Hawker was
aquired by Raytheon, spun off and then merged with Beech.

The current backlog of cabin class business jets is in excess of 2500 units
and climbing.
Falcon Jet and Gulfstream America are slammed.
Super King Air's are hard to come by as well and as far as I know, all of
these guys are pretty healthy.
I supply flight hardware for all of them.

JC

Larry Jaques wrote:

On Wed, 15 Oct 2008 01:55:36 -0400, the infamous "Ed Huntress"
scrawled the following:


After the USSR fell, we didn't even have a
real enemy that amounted to much.

Now we do. It's ourselves. sigh


Pogo was right.
"We have met the enemy and he is us" :-)
...lew... (a long time POGO fan)

On 2008-10-15, F George McDuffee wrote:
On Wed, 15 Oct 2008 14:20:07 -0500, Ignoramus17346
wrote:

On 2008-10-15, F George McDuffee wrote:
OT: this thread seems a good place to insert this piece of
information.

Hi George... Have you given this a thought: just what is the limit of
the ability of the Federal government to support failing banks and
firms?

Let's say, for example, that house prices fall by 15 more percent.
That would, surely, put a lot more mortgages underwater and further
reduce the banks' capitals. Would the Federal government still be able to
prop up the banks?

Or, let's say that foreign investors decide not to buy as many
Treasuries as they used to. (or would insist on loans to be
denominated in non-US currency) That would raise borrowing costs for
everyone, including the Federal government, and add roughly 100
billion per year of debt servicing costs for the US government debt,
for every percentage point of interest rates.

I have a feeling, which I cannot yet quantify, that the staggering
amounts of money being used to plug up the dikes, may not be too far
from the maximum that the government could spend/print without the
currency free fall.

So, making a hypothetical logical leap, let's assume for a minute that
the losses exceed what the Federal government can finance. Then what?
We have a government that just spent trillions, cannot any more effect
any positive changes, and the crisis would continue but with the
government's hands already tied.

i
=========
When you are a sovereign country, you never go broke. Just like
the bank in a game of Monopoly you can always print more money.
Thus the government bonds and other obligations [denominated in
the domestic currency] can and will be paid to the last cent. No
one will lose a penny.

[Technically you don't need to waste the paper and ink. Through
a process of "monetizing the debt," the FRB can create and inject
as much "liquidity" as required/desired in the form of 1s and 0s
in their computer systems. The scam is that the FRB buys
treasury securities using FRB "notes", and through the magic of
fractional banking then issues up to 10X of the notational value
of the treasury securities in new Federal Reserve notes. Every
cycle through the magic money machine generates 9X "new money.,"
with 1X used to buy another batch of T-bills.]

Now whether this "money" is worth anything is a separate
question.

Another question is whether investors would want to continue to lend
to the government, if they expect inflation. Anyway, this issue has
been beaten to death.

The Case-Shiller residential housing index followed a very
smooth and predictable path indicating the "natural" or normal
growth in the "value" of housing. When the housing bubble was
inflating, the actual housing prices grew far faster and far
above the Case-Shiller projections, although there were some
*SLIGHT* offsetting factors such as an increase in floor areas
and furnishing [i.e. granite counter tops], although IMNSHO most
of this was an increase in cost *NOT* value.
http://en.wikipedia.org/wiki/Case-Shiller_index
http://www2.standardandpoors.com/por...0,0,0,0,0.html

Because the housing bubble was not uniform across the country,
the house costs v the Case-Shiller index projection are different
in different areas, but in many of the bubble areas such as
Miami, Las Vegas, and most areas of California, the "ask" prices
are still 30 to 50% above the C-S "norms," and when the house
prices are pro rata adjusted to the CS, 50% or more of the "new"
mortgages are upside down [the mortgage is more, sometimes much
more, than the projected value of the house.] FWIW -- this
indicates that the "mark to market" accounting valuation of the
"toxic" CDOs and other derivatives is largely correct, i.e. they
are worth nil, nada, zip, zilch, zero.

As John C. observed, if you are running a consumer
society/economy, it is poor public policy to bankrupt the
consumer. Leaving all ethics aside, if you are a parasite, and
kill your host, you die too.

I posted this earlier in another thread, from information
available in many of the most important MSAs [metropolitan
statistical areas] a family would have to be in the top 20% [8th
and 9th] income deciles to afford even the median price home
under the max home price = 2_1/2 X annual family income rule.

This is interesting. So, basically, if housing merely "corrects"
itself and returns to its historical trend, we can see further 15-20%
losses just from that correction. If some areas would correct more
than others, it would mean more losses to lenders compared to all
housing going down equally across the zones.

The extra, additional, damage from that would far exceed damage from
the correction up to now.

i

On Wed, 15 Oct 2008 21:15:32 -0500, Ignoramus17346
wrote:
snip
This is interesting. So, basically, if housing merely "corrects"
itself and returns to its historical trend, we can see further 15-20%
losses just from that correction.
Quite likely even higher in the range 30-50% for the most
inflated areas.
If some areas would correct more
than others, it would mean more losses to lenders compared to all
housing going down equally across the zones.

The extra, additional, damage from that would far exceed damage from
the correction up to now.

i
=========
IMNSHO it is exactly this that will be the fatal blow for the
entire house of cards.

The only saving grace up to this point for financial institutions
hold substantial amounts of residential real estate mortgages and
the derivatives based on residential real estate mortgages, i.e.
the CDOs, is that only a tiny fraction of the inflated values
have been written down, yet this was enough to put several banks,
S&Ls, investment bankers and huge mortgage lenders under, eg.
Wachovia, WaMu, Lehman and Countrywide.

The damage has largely been done, from the time the bubbles
started to inflate, and any "real" assets started to disappear,
to be replaced with gold spray painted doggy poop masquerading as
solid gold nuggets.

Most unfortunately this asset appreciation bubble with the
concurrent disappearance of any "real" assets was *NOT* limited
to residential real estate in the US, but includes almost every
economic sector such as commercial real estate, and most large
industrial companies are now facades and shells of what they once
were, leveraged to the hilt and every asset collateral for one
(or more) loans. The derivative CDOs "backed" by commercial real
estate, student loans, credit card receivables and auto loans
total to about 2X to 3X the notational amount of residential
mortgage backed CDOs, with possibly even less "real" collateral."
Substantial amounts of CDS [credit default swap] "insurance has
been written on these "securities" also.

Even more unfortunately, this asset appreciation bubble with the
concurrent disappearance of any "real" assets was world wide
across all the developed countries, and many of the emerging
counties.

The reaction to this? Shoot the messenger, repeal the
Sarbanes-Oxley "mark-to-market" truth-in-accounting requirements,
and stuff the till even fuller of kited/hot checks.

When all the counties and all the economic sectors are having
serious problems at the same time, where can you turn for help?

For example, Iceland has had an economic implosion and is now
trying to borrow 5 billion dollars from Russia, to avoid a
*NATIONAL* default like Argentina. The citizens can see a
looming food emergency with winter coming on, and are attempting
to convert their rapidly depreciating currency into
non-perishable food, stripping the stores and markets.
http://www.bloomberg.com/apps/news?p...d=aVFtDRGwcc50
http://www.bloomberg.com/apps/news?p...8&refer=europe
http://www.reuters.com/article/usDol...28291820081015
http://www.reuters.com/article/marke...64289320081015
http://news.yahoo.com/s/nm/20081014/...ancial_iceland


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Wed, 15 Oct 2008 21:15:32 -0500, Ignoramus17346
wrote:
snip
Let's say, for example, that house prices fall by 15 more percent.
That would, surely, put a lot more mortgages underwater and further
reduce the banks' capitals. Would the Federal government still be able to
prop up the banks?
snip

Housing prices shot the highest and fell the most here.
==========
Losing Las Vegas Shows How Americans Crap Out in Housing Casino

By Daniel Taub and Dan Levy
Oct. 16 (Bloomberg)
snip
Las Vegas leads the nation in falling home prices, foreclosures
and stalled construction projects as economic fear and loathing
becomes the city's biggest export.
snip
The ``main nerve'' of the American dream runs through this desert
metropolis, Hunter S. Thompson concluded in his 1971 book, ``Fear
and Loathing in Las Vegas.'' Chopra, the spiritual teacher whose
writings Sogoloff has turned to, said that less than 2 percent of
the $3 trillion to $4 trillion that circulates in the world's
markets daily is used for goods and services.

`Pure Speculation'

``The rest is trying to make money off money,'' said Chopra,
adjunct professor at Northwestern University's Kellogg School of
Management in Evanston, Illinois. ``Our financial structure
which, of course, is an American system but is now global, is
pure speculation. It's gambling.''
snip
All this in a state that led the U.S. housing boom with an
estimated 275,000 new homes built from 2000 to 2007, a 33 percent
increase that was the highest of any state, according to the
Census Bureau. Now, many of those homes are empty and worth less
than when they were built.
{in point of fact -- if you can't sell them, they aren't worth
anything :-( }
snip
Home Prices Fall

Las Vegas's housing market is the worst in the U.S. Home values
in the area at the end of the second quarter had fallen to March
2004 levels, according to the S&P/Case-Shiller Home-Price Index.
Las Vegas prices fell 30 percent in July from a year earlier, the
biggest drop among 20 U.S. metropolitan areas.

The median price in August was $210,000, and three out of four
home sales were bank-owned properties that were foreclosures, the
Greater Las Vegas Association of Realtors said. Nevada's
foreclosure rate was the highest of any state for the 20th
straight month in August, according to RealtyTrac Inc.
snip
-----------
for complete article click on
http://www.bloomberg.com/apps/news?p...96I&refer=home


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

In the category of "so soon old, so late smart"

------------
Bernanke Foreshadows End to Fed's Hands-Off Approach to Bubbles

By Craig Torres

Oct. 16 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke
signaled an end to the Fed's decades-old aversion to interfering
with asset-price bubbles as the financial crisis reshapes some of
the central bank's most firmly held views on regulation and
monetary policy.

Officials should review how supervision and interest rates can
tackle the ``dangerous phenomenon'' of bubbles in housing, stocks
and other assets that risk bringing the entire economy down,
Bernanke said yesterday. He also warned that banking may be
concentrated in too few hands even as mounting losses and
corporate failures push lenders into mergers.

``There is no doubt that as we emerge from the current crisis
that we are all going to look very hard at that issue and what
can be done about it,'' he told the Economic Club of New York in
response to a question after a speech.

``It's a big change,'' said Ross Levine, a professor of economics
at Brown University in Providence, Rhode Island. ``It brings up
one of the major failures underlying the crisis.''
snip

Housing Epicenter

Bernanke reiterated that the decline in house prices and surge in
foreclosures remains the ``primary source of weakness'' and
indicated he was open to further steps to stem the slide.

The central bank has been criticized for fueling the housing boom
that later turned to bust by keeping interest rates too low for
too long in the first half of this decade. Fed officials have
spent years wrestling with how to prevent bubbles without
damaging the economy, and few have come up with an answer.

snip

`Too Big to Fail'

The U.S. faces ``a very serious too-big-to-fail problem,'' in
which the insolvency of a large financial company could threaten
a market collapse, Bernanke said in reply to an audience
question. ``There are too many firms that are in some sense
systemically critical.''
snip
==========
for complete article click on
http://www.bloomberg.com/apps/news?p...d=apSQDdFroxBs

If a person can have their drivers license revoked for habitual
speeding or "reckless endangerment," even if they drive for a
living, i.e. CDL, I see no reason not to revoke the charters of
banks that engage in "habitual speculation" or "reckless
lending."

As for the firms that are "too big to fail," either break them up
or enact special governance requirements such as governmental
representatives of their boards of directors with voting
membership in the critical executive and compensation committees.

As a culture we do not fatalistically accept periodic plagues and
epidemics as the "will of god," but enact and enforce pure food
and drug laws, pure water laws, and mandatory immunization to
prevent these from occurring in the first place.

As a society we do not fatalistically accept injury and death in
the work place as the cost of economic progress but implement
preventative measures through OSHA and other
regulation/inspection.

Why then do we continue to fatalistically accept economic "booms"
that benefit the few and the "busts" that affect us all?


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

F. George McDuffee wrote:

It all depends what "job" they were attempting to do.

It is a fundamental error, and one that I am frequently guilty
of, to assume the "elite" has the same objectives and indeed the
same view of reality as the vast majority of voters.

It may well be that the "elite" has a brilliant plan, and one
that is succeeding beyond their wildest dreams, but this is
unknown, because if any such plan exists the "mission statement"
and the supporting "policies and procedures manuals" are closely
guarded "state" secrets.

Fortunately, I think they ran out of time. (Well, there's actually
almost 3 months left, let's HOPE they are out of time!) The plan is
awfully close to Marie Antoinette's "let hem eat cake" line! Mainly, to
hell with the peasants, as long as the current-day counterparts to J. P.
Morgan and such are doing fine, they just don't care. The tax plans are
a sure sign of that. We should be making sure that companies cannot be
based in the US, selling tons of products in the US, but come tax time
they say they are based in the Cayman Islands or whatever, and owe no
taxes. The list of ways to cheat the tax man goes on forever, if you
can afford a personal banker and accountant.

Jon

Ed Huntress wrote:


Hmm. That's an interesting take on events. I don't generally agree with it,
but it would be interesting to see how you arrived at it.

I see it more as a set of fortunate circumstances for the US after WWII, but
it didn't necessarily mean "living off the labor of the rest of the world."
We had a lot of things they needed, but most of our economic activity was
strictly internal. In fact, as the rest of the world climbed out of WWII's
aftermath, they targeted the US market first and foremost.
Well, this is very much what I was TRYING to say. Like, go to Saudi
Arabia, or Japan, and the REALLY rich had GE and Frigidaire appliances,
and drove Cadillacs. (This was for the 60's through 80's, I have no
idea if it is still true.) But, it was also true of big stuff, like
aircraft, oil field gear, manufacturing plants like paper mills, and so
on. Bridgeport mills, Caterpillar earthmovers and IBM mainframe
computers were the "in thing" too. That kind of stuff DID bring in a
lot of foreign exchange money, and it just kept piling up. It has taken
us decades to squander it.

Jon

On Thu, 16 Oct 2008 16:20:18 -0500, Jon Elson
wrote:

F. George McDuffee wrote:

It all depends what "job" they were attempting to do.

It is a fundamental error, and one that I am frequently guilty
of, to assume the "elite" has the same objectives and indeed the
same view of reality as the vast majority of voters.

It may well be that the "elite" has a brilliant plan, and one
that is succeeding beyond their wildest dreams, but this is
unknown, because if any such plan exists the "mission statement"
and the supporting "policies and procedures manuals" are closely
guarded "state" secrets.

Fortunately, I think they ran out of time. (Well, there's actually
almost 3 months left, let's HOPE they are out of time!) The plan is
awfully close to Marie Antoinette's "let hem eat cake" line! Mainly, to
hell with the peasants, as long as the current-day counterparts to J. P.
Morgan and such are doing fine, they just don't care. The tax plans are
a sure sign of that. We should be making sure that companies cannot be
based in the US, selling tons of products in the US, but come tax time
they say they are based in the Cayman Islands or whatever, and owe no
taxes. The list of ways to cheat the tax man goes on forever, if you
can afford a personal banker and accountant.

Jon
===========
I think you are most likely correct.

There does not appear to be any master plan to screw the
US/global economy into the ground, just super incompetence and
nothing but "good news" for the bosses, i.e. s**t happens.

I base this on the observation that many of the people
accountable for the mess have suffered paper losses on the stocks
they held in their firms [didn't these people ever here of
diversification?] in the tens to hundreds of millions of dollar
range, with a few like Greenberg [AIG] having losses into the
billions. If there had been a plan, they would have not suffered
these losses, would have shifted most of their assets out of US
control, and would have made better preparation for a *VERY*
comfortable life in countries without extradition treaties with
the US.

On the other had it appears equally plausible that a few people
got extra greedy and started skimming excessively, bringing the
entire system down, or that you had some "young turks" who wanted
"a piece of the action," took it, and there was simply not enough
juice in the system to go around.

It is depressing to note that other than applying huge hot money
poultices to the economic problems using taxpayer money,
*NOTHING* has been done in the way of identifying actual root
causes, and enacting regulations to prevent their
continuation/reoccurance.

For example, the SEC refusal to reinstate the "uptick" rule for
short selling. Derivatives and the derivatives markets must be
standardized and regulated, and draconian controls on excessive
leverage must be implemented if the "free market" is to be
anything but a suicide pact in the new century.

Your observation about tax evasion/avoidance appears directly on
target. One way around this is called "unitary taxation." When
California attempted to implement this many years ago because of
the proliferation of out-of-state/out-of-country businesses [e.g.
BP, Barclays] using transfer pricing to shift income to low/no
tax jurisdictions, the US government had a hissyfit. Basically
"unitary taxation" says that if a company does 50% of its
unified/consolidated business in a given tax jurisdiction, then
50% of its unified/consolidated income was earned in that
jurisdiction, and subject to that jurisdictions regulations and
tax rates. This is not a new problem, but dates as far back as
the railroads.
http://findarticles.com/p/articles/m...v84/ai_3329237
http://findarticles.com/p/articles/m...55/ai_n6049567
http://findarticles.com/p/articles/m..._/ai_n18303264
FWIW -- the two largest companies in Texas, Dell and Southwest
Bell Telephone largely escape paying state franchise taxes [no
state income tax] by income shifting to their Delaware
affiliates.
---------
snip
The fine print in the Texas corporate franchise-tax law now
allows Texas companies to use a maneuver involving Delaware
subsidiaries and limited liability partnerships to practically
avoid paying the state franchise tax on most of their assets.
(The Texas franchise tax--set at 0.25% of a company's taxable
capital in Texas or 4.5% of its earned surplus, whichever is
greater--is the closest thing Texas has to a corporate income
tax.)
snip
--------
for complete article click on
http://www.forbes.com/2003/04/30/cz_ae_0430beltway.html

It is particularly galling to me to realize that the major
financial firms, and firms with major financial operations, now
with their snouts in the public "bailout" trough up to their ears
have systematical avoided, if not evaded, paying their fair share
of taxes for years.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Wed, 15 Oct 2008 13:27:47 -0700, "John R. Carroll"
wrote:

snip
The metric of choice in civil aviation doesn't involve Boeing at all,
It's the heatlth of the operators that's important and they are very sick
and have been for years. Another instance where opaque deregulation has
lead to failure of an industry.

JC

I was with you all the way up to the end, but I disagree with the last
sentence.

Deregulation? Of civil aviation?

Yes.
Have you looked at the shenanigans surrounding ticket pricing?
Fairs used to be regulated in a way that kept them high enough to cover
costs.
Fair wars aren't good for the airlines or, in the long run, passengers.

No, the failure of that particular industry is entirely due to the legal
industry.

How's that?
Rate deregulaion lead to maintenance practices that were criminal fraud.
Is that what you mean?

JC
----------------
The list is long but looks as if it is about to get longer.

At the top:
Lockheed
McDonald-Douglas

then
Eastern
TWA
PanAm
Brannif
and a bunch more, some several times through the bankruptcy
courts.

for the latest see
-------------
Plane engines found with damaged, missing parts

By JOAN LOWY, Associated Press Writer Joan Lowy, Associated Press
Writer – Thu Oct 16, 8:00 pm ET

WASHINGTON – After finding several passenger aircraft engines
with damaged and missing parts, safety officials on Thursday
urged the Federal Aviation Administration to order inspections of
similar engines, particularly those long in service.

The PW2037 engines currently are in use in 725 Boeing 757
jetliners, according to Pratt & Whitney, their manufacturer.

snip
--------------
for complete article click on
http://news.yahoo.com/s/ap/20081017/...vbjtuUGyFz 4D

also see
-------------
Correction: Aircraft engine story

Fri Oct 17, 2:29 pm ET

WASHINGTON – In an Oct. 16 story about a safety recommendation on
Pratt & Whitney engines, The Associated Press reported the wrong
number of jetliners equipped with the PW2037 engine. Pratt &
Whitney says that as of May 31 there were 289 aircraft with those
engines, not 725.
--------------
==I feel so much better....==

for complete article click on
http://news.yahoo.com/s/ap/20081017/... wyxWKWF.yFz4D


I agree that the "off with their heads" solution is far too
French, so "up against the wall!"


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Tue, 14 Oct 2008 13:39:47 -0700, "John R. Carroll"
wrote:
snip
Indeed, but an expected problem when the "elite" are "world
citizens" and the companies they control are transnational
corporations, while everyone else [except for the "undocumented"
guest workers] are American citizens, with their homes and small
businesses located in the USA.

That really isn'y much of a problem George. The US market is the US market
and it's in the US.
snip
============
You may find the foollowing B/W oped of interest.
--------
This Is Not Bill Clinton's Financial Crisis
The U.S. economic meltdown was caused by this decade's greed,
lack of regulation, and absent energy policy, says BusinessWeek
reader Jim Kinney

By Jim Kinney
BW Exclusives

A technology director from Arlington, Va., Jim Kinney has been a
BusinessWeek reader for 15 years and a BusinessWeek.com reader
for 13 years.

With plenty of blame for the U.S. financial crisis to go around,
some have gone so far as to suggest the Clinton Administration is
somehow responsible. Let me explain why that is nonsense.

Deregulation, corporate greed, irresponsible lenders, uneducated
borrowers, a lack of criminal penalties, and abuse of credit
cards and home equity loans are all cited as causes. They are
true contributors to this mess, and they all festered during
President George W. Bush's tenure.

Financial systems are supposed to make capital available to
facilitate commerce and trade. The financial system that is
coming to an end was based on artificially creating wealth
instead of supporting tangibly productive activities.

Solid Wood Turned into Pressboard

Hedge funds weren't launched until the end of the Clinton
Administration; no one can blame Clinton for the way operators
exploited them. Credit default swaps and derivatives were
purposely made incomprehensible by mathematical models that no
human or regulator could understand. They created an
unprecedented opportunity for investment bankers and chief
executives to skim wealth off the top and leave taxpayers with a
huge liability, again while Bush and Congress were asleep at the
wheel.

Meanwhile, we were sold a bill of goods with globalization. Brand
names such as Black & Decker (BDK), Maytag (WHR), Levi Strauss,
and Motorola (MOT) used to adorn U.S.-made products of the
highest quality. These brands mean nothing now, as virtually
everything—regardless of the sticker slapped on it—is made in the
same Chinese factory. We've ended up with products that, if not
outright dangerous, just don't last very long. Instead of
high-quality, solid wood furniture made in the nation's furniture
capital of Highpoint, N.C., we're offered foreign-made, cheap,
and heavy-pressboard furniture covered with plastic "wood grain"
veneers and glued together with toxic chemicals.

The South lost the U.S. Civil War in large part because the North
had all the manufacturing. The whole country faces a similar
situation today. We've abdicated our national security by
shipping all of our manufacturing overseas. A recent BusinessWeek
gave a perfect example of this situation's risks, revealing that
our military aircraft are filled with worthless counterfeit
Chinese chips (BusinessWeek, 10/2/08). How did this happen?
Bring Manufacturing Home

We've all known instinctively that getting rid of our factories
made no sense. Clinton did support the North American Free Trade
Agreement, but oil was so cheap then that globalization seemed
like a good idea. Without factories, America's true productivity
tanked. Businessweek's June 18, 2007, cover story, "The Real Cost
of Offshoring," exposed how our government had been
miscalculating productivity for years. I hoped the article would
finally get the attention of Bush and our policymakers so
Americans would rethink globalization. Nothing happened.

Shipping our manufacturing overseas saved us a few bucks at
Wal-Mart (WMT), but our wages stagnated. The only asset many
Americans have left is their home. Sadly the newer homes have
been built farther and farther away from cities and jobs. We gave
up farms and orchards in exchange for poorly made McMansions with
vaulted ceilings and high heating bills so we can waste our time
in long commutes. We became a nation of shoppers, with each city
or town retrofitted with the same Starbucks (SBUX) and Gaps (GPS)
you can find anywhere else. America has been "malled" by asphalt
and tacky shopping centers.

We must start to restore productive activities to our economy by
bringing our manufacturing home again.
A National Energy Program

But the worst indictment that could be made against the Bush
Administration is that eight years have been squandered with no
effort made to address our dependence on oil. The financial and
economic implosion started when oil reached $140 a barrel. We
finally got a small taste of what life would be like if gas were
$5 or $10 a gallon. Suddenly the allure of the suburbs and those
gas-guzzling SUVs evaporated. Let's hope declining gas prices
will not lull us back into sleepwalking around our dangerous oil
addiction. We have no contingency plans should oil supplies be
disrupted—naturally, or by governments or terrorists. That's a
scenario to make this financial meltdown look like a cakewalk,
because we import 70% of the oil.

The money that went to pay for the war in Iraq and the bailout (a
trillion dollars apiece) could have been spent on hundreds of
nuclear power plants, research into fusion and alternative
energies, converting our cars to electric, or upgrading our rail
system. We can't waste another day without developing a national
policy to address energy and transportation together. We need an
effort equal to the moon race to solve our energy crisis. It is
the only way to restore our personal, national, and financial
security as we rebuild an economy based on truly productive
activities. The next Presidential Administration must address
this.
=============
from
http://www.businessweek.com/bwdaily/...017_373460.htm

*DON'T* HOLD YOUR BREATH!


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Tue, 14 Oct 2008 14:03:16 -0700, "John R. Carroll"
wrote:


"Jon Elson" wrote in message
m...
Ed Huntress wrote:

Yes! The source of America's strong economy for 50 years was an overpaid
and underworked middle class. g Given that our growth has been
stimulated mostly by individual consumption, there's a lot of truth in
that wisecrack. Restoring it in a globalized economy, however, probably
is impossible.

Actually, I think we were living off the backs and labor of the REST of
the world,

Actually we were squandering the wealth earned by an earlier generation and
the wealth that would necessarily have to be created by the next.
We have arrived.


JC

======================
Is this the next step in the US? These private pension funds
were established on the advice of the IMF and Chicago School of
Economics consultants.

------------------------------
Argentine Government Seeks Control of Private Pension (Update1)

By Bill Faries and Eliana Raszewski

Oct. 21 (Bloomberg) -- Argentine President Cristina Fernandez de
Kirchner signed proposed legislation calling for the
nationalization of the country's private pension system.

The proposal to take control over 10 funds, which hold about
$29.3 billion in savings, will be sent to Congress today,
Fernandez said in an interview with C5N television after she
signed the proposal. Amado Boudou, head of the country's social
security administration, said the private pensions, which were
established in 1994, were an ``enormous error.''

``We are taking this decision in a context where the biggest
countries, members of the G8 and others, are taking protective
measures for their banks,'' Fernandez said during a rally in
Buenos Aires. ``Instead, we're taking them for our retirees and
workers.''

Fernandez has struggled to find new sources of funding for the
government since the global financial crisis complicated efforts
to renegotiate $20 billion in defaulted bonds and pay off about
$6.7 billion owed to the Paris Club group of creditors. The
country hasn't had access to international debt markets since
defaulting on $95 billion of bonds in late 2001.

``The government had two options: reduce spending, eliminate
subsidies and pay a political price or put its hands into the
retirement accounts of the people,'' Federico Pinedo, an
opposition lawmaker, said in a statement before the legislation
was signed.
snip
----------------
for complete article see
http://www.bloomberg.com/apps/news?p...jns&refer=home


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

This thread looks like a good spot to post this little gem.

Time for the ol' one-two sucker punch?

Much has been made of the sub-prime/alt-a CDO derivatives
kamikaze dive, but another, possibly larger group of derivatives
based on corporate debt is starting to tank. ==Note that the
notational/face value of these "investments" is about twice the
value of the sub-prime/alt-a CDOs.==

BANZAIIIIIIIIIII

===============
CDO Cuts Show $1 Trillion Corporate-Debt Bets Toxic (Update1)

By Neil Unmack, Abigail Moses and Shannon D. Harrington

Oct. 22 (Bloomberg) -- Investors are taking losses of up to 90
percent in the $1.2 trillion market for collateralized debt
obligations tied to corporate credit as the failures of Lehman
Brothers Holdings Inc. and Icelandic banks send shockwaves
through the global financial system.

The losses among banks, insurers and money managers may spark the
next round of writedowns on CDOs after $660 billion in
subprime-related losses. They may force lenders to post more
reserves against losses after governments worldwide announced $3
trillion in financial-industry rescue packages since last month,
according to Barclays Capital.
snip
Some synthetic CDOs, tied to credit-default swaps on corporate
bonds, are trading at less than 10 cents on the dollar, according
to Sivan Mahadevan, a derivatives strategist at Morgan Stanley in
New York.

CDOs parcel fixed-income assets such as bonds or loans and slice
them into new securities of varying risk, providing higher
returns than other investments of the same rating.

The synthetic variety pools credit-default swaps, which are
derivatives based on bonds and loans and used to protect against
or speculate on defaults. Should a borrower fail to meet debt
agreements, the contracts pay the buyer face value in exchange
for the underlying securities or the cash equivalent. An increase
in the agreement's cost indicates a deteriorating perception of
credit quality.

About $254 billion of CDOs tied to mortgages for borrowers with
poor credit histories have defaulted, according to Wachovia Corp.
Tracking defaults on those linked to corporate bonds will be
difficult because the market is largely private, said Mahadevan.
snip
Demand for synthetic CDOs pushed the cost of default protection
to record lows in 2007, driving down company borrowing expenses.
Sales surged to $503 billion in 2006, from $84 billion five years
earlier, according to Morgan Stanley.

High Return

Bankers loaded the securities with bonds and swaps offering the
highest return for a given credit ranking, indicating additional
risk. An AA rated European issue offered an average yield of 50
basis points over money-market rates when sold in 2006, according
to UniCredit SpA analysts in Munich. Similarly rated corporate
bonds paid 9 basis points. A basis point is 0.01 of a percentage
point.

``The maths ended up driving the way CDO portfolios were put
together,'' said Nigel Sillis, a fixed-income and currency
analyst at Baring Asset Management Ltd. in London.

==The banks that structured the securities and investors both
failed to do ``fundamental credit analysis,'' said Janet
Tavakoli, president of Tavakoli Structured Finance in Chicago.
``They were using correlation models, they were using spread
models, but they weren't doing analysis on the underlying
corporations.''== {SO SOON OLD, TOO LATE SMART...}

Fitch downgraded 422 classes of CDOs on Oct. 13 after seven
financial companies defaulted or were bailed out since September.
The company didn't disclose the total number of classes it rated.
snip
-------------
for complete article click on
http://www.bloomberg.com/apps/news?p...4yc&refer=home


These are numbers from astronomy, not finance!!!


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Wed, 15 Oct 2008 11:16:15 -0500, F. George McDuffee
wrote:

snip
It's also worth having a
look at income distribution in 1950 compared to today.
snip
The metric for this is called the GINI index, and when you
compare the US GINI over time and against other countries it will
make your hair stand on end.
to see a graph click on
http://mcduffee-associates.us/PE/gini1.pdf
========
A follow up to my follow up...

--------------
Group's Study Finds Income Gap Widening
ASSOCIATED PRESS
Economic inequality is growing in the world's richest countries,
according to a 30-nation report released Tuesday.

The gap between rich and poor has widened over the past 20 years
in nearly all the countries studied, even as trade and
technological advances have spurred rapid growth.

The Paris-based Organization for Economic Cooperation and
Development said its 20-year study found inequality had increased
in 27 of its 30 members as top earners' incomes soared while
others' stagnated.

==The U.S. has the highest inequality and poverty rates in the
OECD after Mexico and Turkey== {Mexico and Turkey!!!!}, and the
gap has increased rapidly since 2000, the report said. France saw
inequalities fall as poorer workers are better paid.

Wealthy households are not only widening the gap with the poor,
but in countries such as the U.S., Canada and Germany they are
leaving middle-income earners farther behind.

The two decades covered in the study, 1985-2005, saw a period of
overall strong economic growth.
snip
----------------
for complete article click on
http://online.wsj.com/article/SB122464532734457657.html
http://hosted.ap.org/dynamic/stories...elated_content

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Mon, 13 Oct 2008 21:30:30 -0500, Ignoramus31919
wrote:

http://www.nytimes.com/2008/10/14/bu...4treasury.html

``The government will purchase perpectual preferred shares in all the
largest U.S. banking companies. The shares will notbe dilutive to
current shareholders, a concern to banking chie executives, because
perpetual preferred stock holders are paid a dividend, not a portion
of earnings.''

Excuse me?

Adding perpetual "holders" who are paid dividends is dilutive by
definition.

So the government plan is to give big money to big banks. That's easy.
snip bunch of good stuff
-----------------------------

Even more insane is the huge valuations placed on "good will" by
not only the banks but many of the other major US corporations,
including automotive.

When "good will" and other assets in the "cobwebs and moonbeams"
category are stripped out, many of these corporations have
*NEGATIVE* stockholder equity.

Anyone see a problem with a mandatory 5 year straight-line
amortization/write-off of "good will?"

Remember -- these are the corporations where *YOUR* tax money is
being and will be "invested." It should also be clear why the
Sarbanes-Oxley "mark to market" asset valuation mandate is such
a knot in their pantyhose.

-----------------
Regions Financial Must Think We're All Stoned: Jonathan Weil

Commentary by Jonathan Weil

Oct. 23 (Bloomberg) -- You have to wonder who the people running
Regions Financial Corp. think they're kidding.

So far this year, the Birmingham, Alabama-based regional bank
says it has earned $622.5 million, including $79.5 million of net
income last quarter. In reality, Regions probably has lost
billions. The bosses just won't admit it.

It all comes down to that pneumatic, intangible asset known as
goodwill, which is about as valuable as the air in a paper sack.
As of Sept. 30, according to Regions, the bank's goodwill was
worth $11.5 billion, slightly more than the quarter before.
That's about 59 percent of Regions' book value, and $4.1 billion
more than what the stock market says the entire company is worth.

snip

It's become standard fare for banks to insult the public's
intelligence by publishing asset values that defy logic. Saying
Regions' goodwill is worth $11.5 billion would be like a hen
bragging that her unlaid egg weighs more than she does.

Matter of Trust

There's a bigger problem here, though. By sticking to that
goodwill valuation, Regions executives might as well be telling
us we can't trust a single number on their financial statements.

This is a lesson they should have learned already from Wachovia
Corp. and Washington Mutual Inc. It wasn't until yesterday, long
after its stock collapsed, that Wachovia finally began writing
down some of the $14.9 billion of goodwill from its October 2006
acquisition of mortgage lender Golden West Financial Corp., near
the housing bubble's peak.

Before then, the Golden West goodwill, all by itself, purportedly
was worth more than Wells Fargo & Co.'s purchase price for all of
Wachovia. Similarly, Washington Mutual for months was trading for
less than the supposed value of its goodwill, until the thrift
filed for bankruptcy last month.

Those companies might have stood a chance of surviving if they'd
come clean about their asset values much sooner. Instead, they
got carried off the field.

snip

It's also of little comfort that Regions is the largest audit
client of Ernst & Young LLP's Birmingham office. Back in 2003,
that office's largest client had been HealthSouth Corp., which
turned out to be a massive fraud.

There's something strange about this town, too. Jefferson County,
home to Birmingham, is almost insolvent. Last week, county
commissioners there defeated a proposal to file for bankruptcy.
It was a close vote, though, 3-2.

snip

---------------
for complete article click on
http://www.bloomberg.com/apps/news?p...T_Y&refer=home
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

I don't believe this can be happening.....

------------

AIG's Liddy Says $122.8 Billion U.S. Loan `May Not Be Enough' By
Hugh Son Oct. 23 (Bloomberg) --

American International Group Inc., the insurer bailed out by the
U.S., may need to borrow more than the $122.8 billion already
offered by the government if capital markets don't improve, said
Chief Executive Officer Edward Liddy.
snip
``One of the lessons from the savings and loan crisis is that
firms that were going under forestalled the recognition of how
severe the problem was through accounting, and with the
cooperation of regulators,'' Bergman said. ``I certainly hope
that's not happening with AIG today.''

AIG's losses have led to the ousters of two CEOs, Martin Sullivan
and Robert Willumstad, in the last five months.
snip
---------------
for complete article click on
http://www.bloomberg.com/apps/news?p...Kyw&refer=home

And the band played on ......


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On 2008-10-23, F George McDuffee wrote:
I don't believe this can be happening.....

I am not in the least surprised.

i

------------

AIG's Liddy Says $122.8 Billion U.S. Loan `May Not Be Enough' By
Hugh Son Oct. 23 (Bloomberg) --

American International Group Inc., the insurer bailed out by the
U.S., may need to borrow more than the $122.8 billion already
offered by the government if capital markets don't improve, said
Chief Executive Officer Edward Liddy.
snip
``One of the lessons from the savings and loan crisis is that
firms that were going under forestalled the recognition of how
severe the problem was through accounting, and with the
cooperation of regulators,'' Bergman said. ``I certainly hope
that's not happening with AIG today.''

AIG's losses have led to the ousters of two CEOs, Martin Sullivan
and Robert Willumstad, in the last five months.
snip
---------------
for complete article click on
http://www.bloomberg.com/apps/news?p...Kyw&refer=home

And the band played on ......


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

--
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On Thu, 23 Oct 2008 15:09:19 -0500, Ignoramus28420
wrote:

On 2008-10-23, F George McDuffee wrote:
I don't believe this can be happening.....

I am not in the least surprised.

i
-----------
I meant in the sense of watching a train wreck occur, as if in
slow motion, from a distant vantage point.

It is long past time to cut the crap, put AIG into
conservatorship along with Freddie and Fannie, bring in the
forensic accounting teams, shut AIG down for two weeks, change
the locks, and start winding things up.

AIG and their stockholders' equity is dead, and the
unsecured/uncollateralized AIG debt obligations are worth little
to nothing. Its time to put the stake in the heart of this
vampire (and spread some garlic around, just to be on the safe
side) before it sucks any more blood from the taxpayers via the
financial system.

Many of the component parts of AIG still remain viable, even
valuable, and many of these are well run insurance operations
under strict state control. One possible "solution" would be to
"de merger" these solvent separate operations back into separate
corporations, domiciled/chartered in their "home" states, and
distribute these shares on a pro rata basic among the secured and
other AIG creditors as a debt for equity swap in these successor
companies, in at least partial (re)payment.

The indictments and criminal/show trials can occur at a later
date.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).