I wrote a comment in DJ13Francis diary and decided it was worth turning into a diary of my own. :-)
The comment I replied to, There are still birds, a nice riff off the original diary, included the phrase that became my title. Let us begin.
Those aren't birds, friend ...
They look like neocon vultures to me.
It is not fear to take pessimistic measures for an uncertain scenario of economy. I've been trying to get this message through to my daughter-in-law in Montreal.
My advice certainly includes have a well-stocked pantry, if not more. But the transition period could well be brief, yet very problematic. Thus, I told Patty: Hide $100 from yourself and everyone else, forget about it. Otherwise, you wake up one morning, the banks are shut, ATMs won't work, your pockets are empty, the pantry bare, little gas in the car. Et cetera.
Her reply re money was, never have any extra. But today, on IRC chat, she was talking about an Ebay auction, a ring she thought was 'nice'.
Please turn the page
The first warning flag I saw last year was when the Fed stopped publishing the M3 -- which is the supply of money. Uh oh, there's trouble right here in River City. So I started chasing real analysis of the markets and finding old clues.
Like USG, number one manufacturer of drywall products, trashed 1,100 jobs last year. Hmmm, in an alleged boom? Other building materials suppliers were/are downsizing. Home Depot. And so on.
About January, I stopped reading so much and got active in comments and blogging. Not many people took notice.
Now they do. Notice another thing, almost every MSM article about the mortgage crisis is still pushing the 'look over here, shiny: sub-prime sector.' But the spread through Alt-A into prime and then jumbo mortgages was already showing up in the first quarter.
One thing I did miss, my bad, but who would have imagined? Oh, I'd already predicted pension fund problems, that was easy. But the last thing I would have thought, now problems showing up to do with municipals??? What ... safest thing in the world, one knew, from 'conventional wisdom'. Not now.
Of course, the other elephant in the room is the government statistics, maybe not lies exactly but certainly 'economical with the truth' -- like low unemployment? How so. IBM has been downsizing, HP, Microsoft -- and all three are screaming for H1Bs. Right. And worst hit states like California were already losing construction workers early in the year.
But apparently, if one is not actively looking for work, well, you're not unemployed. There is also, I'm told, a way to fiddle the birth-death statistics to make unemployment look better. Out of my depth on that one. And the GDP counts in offshored production of American companies. So trashing U.S. jobs is a boon for corporatocracy indeed.
Low inflation? CCPI doesn't include fuel and food, funny about that.
Paulson had to go ask the cap be raised on the national debt. Which is now over 9 trillion and ticking up. Even worse, that is without derivatives. One analyst reckons the true size would be 71 trillion. And one of my money market newsletters suggests the sub-prime mortgage market is but 10% of the overall damage to the economy.
Bush expects to give numerous billions in military aid to ... Israel, Saudi Arabia, and a few others. $1.2 billion to Calderon for the war on drugs, little things like Blackhawk helicopters, assault weapons, vehicles, and training. And a new $15 billion further plan on the WoD. Which at this point in time since Nixon unleashed it in 1971, has cost the U.S. one trillion dollars.
In that time, it's spawned two industries. The supply side and the law enforcement side. The drug cartels have built an illegal trade into an international industry at around 500 billion dollars. No idea what DEA and the rest of that food chain costs.
But the end result is: street prices are lower, quality better, the faithful Taliban are increasing their poppy farming, the cartels in Colombia are more sophisticated. Even to the point of having their own submarines now!
But that's only fair -- the latest have-more toy of conspicuous consumption is ordering one's own submarine. There one firm in Seattle, for sure. Just walk up with $50 million base price and choose your accessories. :-)
Well, so our economy is crazy. It's like, in American Samoa in early 70s, the sea receded sooooo far one day. People looked out in amazement, no one was frightened. Indeed, some walked out a considerable distance on the now-dry reef. And further. The ... faintly ... "What's that noise?" And then a black line on the horizon, and thicker. And louder. In sudden panic, they knew: here come da tsunami. Fear.
What is that big bird in the sky? Oh! it's a Roc. Get undercover, just in case ...