Saturday, September 20, 2008

WHAT ARE YOUR REASONS FOR NOT VOTING FOR BARACK OBAMA?



After you have watched this video, ask yourself these questions and select your reason not to vote for Barack Obama:

1. You are a party-line Republican.

2. You are a White Democratic or Independant voter and you are a racist.

3. You are among a handful of New Mexican Hispanic voters who are racists.

4. None of the above.

If you answered #4, "None of the Above", insert your answer, along with your reasons supported by cogent argument, in the Comment section below.

RACE IS A CONSTRUCT AND BIGOTRY IS UNLAWFUL IN THE DESERT OF THE REAL!

COMMERCIAL PAPER FALLS OFF THE BOOKS

FINANCIAL DEATH BY A THOUSAND AND ONE COMMERCIAL PAPER CUTS

The Author is in a particularly busy point in what masquerades as his professional life in the Land of Underemployment. This struggle to “work harder for less” has drained away time and mental resources from reasoned questions and economic analysis.

But his brain has not shut down entirely. All week he has been asking the question: "What crashed the financial markets so fast. "Through which gate did the Vandals enter?”

The financial decline has been festering for a long time. Real estate reeling, mortgages in meltdown. Liquidity lacking. But what changed so quickly and so ominously?

Or what, as the New York Times article “Congressional Leaders Stunned by Warnings,“ spooked the Senators speechless?

From the NYT article of today (9.20.2008):

It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”


TO QUOTE FRED WILLIARD, “WHA’ HAPPENED?”

John Mauldin publishes several investment newsletters. In September 19th’s Newsletter entitled “Betting on Financial Armageddon”, Mauldin swings the spotlight onto the padlocked commercial paper market. (Commercial paper is a short-term unsecured promissory note that large institutions use to borrow and lend cash to other institutions.)

Want to see in graph form how bad it got and what spooked Paulson, Bernanke and company to act so quickly? Look at these graphs from my friends at Casey Research. 30day commercial paper went to 5% from 3% a week ago. The market was literally freezing. And the amount of paper issued is in free fall. Commercial paper is the life blood of the financial and business world. Without it commerce will soon grind to a halt.

Two charts posted above this article demonstrate the precipitous decline in the commercial paper market.

The Congressional leaders quoted in the New York Times above make similar reference to a strangling credit market:

Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.

“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”


GOLDEN PARACHUTING INTO THE ABYSS

Currently, and over the next few days, the Congress and the outgoing administration will be negotiating over the terms of a financial “rescue” plan that has an undetermined chance of indeterminate success over an undefined time frame.

As the damage appears and the plan develops, the Author will continue to post, analyze, and prognosticate.

WE HOPED THAT IT WOULD NOT HAVE COME TO THIS IN THE DESERT OF THE REAL!