In Shocked, Stunned Disbelief

For Sale $1 Million O.B.O.

OK, let me start off by saying this Xterra is only available for purchase by the manliest of men (or women). My friend, if it was possible for a vehicle to sprout chest hair and a five o'clock shadow, this Nissan would look like Tom Selleck. It is just that manly.



It was never intended to drive to the mall so you can pick up that adorable shirt at Abercrombie & Fitch that you had your eye on. It wasn't meant to transport you to yoga class or Linens & Things. No, that's what your Prius is for. If that's the kind of car you're looking for, then just do us all a favor and stop reading right now. I mean it. Just stop.



This car was engineered by 3rd degree ninja super-warriors in the highest mountains of Japan to serve the needs of the man that cheats death on a daily basis. They didn't even consider superfluous nancy boy amenities like navigation systems (real men don't get lost), heated leather seats (a real man doesn't let anything warm his butt), or On Star (real men don't even know what the hell On Star is).

No, this brute comes with the things us testosterone-fueled super action junkies need. It has a 265 HP engine to outrun the cops. It's got special blood/gore resistant upholstery. It even has a first-aid kit in the back. You know what the first aid kit has in it? A pint of whiskey, a stitch-your-own-wound kit and a hunk of leather to bite down on when you're operating on yourself. The Xterra also has an automatic transmission so if you're being chased by Libyan terrorists, you'll still be able to shoot your machine gun out the window and drive at the same time. It's saved my bacon more than once.



It has room for you and the four hotties you picked up on the way to the gym to blast your pecs and hammer your glutes. There's a tow hitch to pull your 50 caliber anti-Taliban, self cooling machine gun. I also just put in a new windshield to replace the one that got shot out by The Man.

My price on this bad boy is an incredibly low $1,000,000, but I'll entertain reasonable offers. And by reasonable, I mean don't walk up and tell me you'll give me $5,000 for it. That's liable to earn you a Burmese-roundhouse-sphincter-kick with a follow up three fingered eye-jab. Would it hurt? Hell yeah. Let's just say you won't be the prettiest guy at the Coldplay concert anymore.

There's only 69,000 miles on this four-wheeled hellcat from Planet Kickass. Trust me, it will outlive you and the offspring that will carry your name. It will live on as a monument to your machismo.



Now, go look in the mirror and tell me what you see. If it's a rugged, no holds barred, super brute he-man macho Chuck Norris stunt double, then contact me. I might be out hang-gliding or BASE jumping or just chilling with my ladies, but I'll get back to you. And when I do, we'll talk about a price over a nice glass of Schmidt while we listen to Johnny Cash.

To sweeten the deal a little, I'm throwing in this pair of MC Hammer pants for the man with rippling quads that can't fit into regular pants. Yeah, you heard me. FREE MC Hammer pants.



Rock on.

You're Fired

Reuters is reporting that Trump Entertainment Resorts Inc., the casino company founded by Donald Trump, is late in paying $53 million in bond-interest and is negotiating with creditors on ways to restructure the company’s finances.

The casino owner posted its fourth straight quarterly loss this month as its Atlantic City properties attracted fewer gamblers and it wrote down the value of its Taj Mahal Casino.

Dear Mister Fantasy-land

RIP Brent. RIP Jerry.

TARP?

No, TALF.

The Federal Reserve Board on Tuesday announced the creation of the Term Asset-Backed Securities Loan Facility (TALF) and in doing so, conjured up another $800 billion out of thin air. The central bank plans to (I say "plans to" because judging by the TARP that could change by tomorrow morning) buy $600 billion in GSE assets. Under the TALF plan, $200 billion in credit card debt, student loan debt and auto loan debt will also be purchased. The purchases are expected to occur over the next three to six months.

Some of the trillions of dollars that have been pumped/injected/firehosed into the system in the last 18 months has not been inflationary, because it has been offset or removed from other parts of the system. Todays $800 billion, however, is admittedly and unabashedly straight off the printing press. God help you if you don't have some inflation protection because once we get through this deflationary mess you're going to need it.

At this point it is the Federal Reserve and U.S. Treasury that are assuming the credit risk. This is like walking a tightrope. How can the U.S. dollar stand up against this wild money creation?

Based on bid-to-cover ratios, the Treasury is already starting to have minor problems selling its T-bills, notes and bonds. If buyers (most of them foreign central banks) start to walk away from the dollar, the situation could and would go from bad to much, much worse - and in a hurry.

Full blown quantitative easing would be the last bullet in the chamber. Fed funds rate 0% dead ahead.

Zombie Nation

The model of getting something for nothing and then levering up for more is dead, and it's going where evil dead things go - to George Romero's hell.

The consumer is a fat zombie. Gone are the credit based days of living the phony MTV cribs life. Zombie credit card companies pile on the zombie consumer. Zombie auto makers on top of zombie credit card companies. The zombie banks pile on. The zombie airlines, the zombie homebuilders and zombie hotel chains will be next. An orgiastic zombie dogpile.

If the market was truly free, most banks would be insolvent. But we can't have insolvent banks so we change accounting rules and flood their imploding balance sheets with taxpayer federal reserve note funny money.

Consumers can't afford to make their minimum credit card payments so American Express is insolvent. It remakes itself as a bank holding company to gorge on the zombie money flesh.

The American auto industry is walking dead. They'll suck the money blood out of anyone within fangs length and spread their disease.

The zombie groan of homebuilders, airlines and hotel chains will be heard soon.

Fressshhhh braaaaaiiinnsss. Resistance is futile. We'll all be reanimated corpses soon, feeding on the last vestige of the 20th century economy until the landscape is a baron bloodied wasteland of strip malls and spec homes. Then, like the first beams of sunrise light, the fossil fuel and hyperinflation holocaust will melt us in our tracks.

By the way, the Lakers have the best record in the NBA with 11 wins and only 1 loss.

Primary Bear Market Reconfirmation

October 3rd deja vu.

On Thursday, the Dow Industrials and Transports both reconfirmed the primary bear market. The fact that they, both breaking to new lows, did it on the same day is forebodingly ominous.

What does it mean? Obviously no one can say for sure what the future holds, but looking back, one thing is clear: this bear market did not start in October of 2007, it started in January of 2000. The October 2007 high was not the end of a bull market that began in 2002, it was a double top.

If I had to guess, I'd say that this bear market is going to be more vicious than any in history. Year to date, 2008 has already delivered the second worst decline ever. But I'm afraid that it's going to get more nasty than most people are expecting. We may not see the bottom for several years, and when we do 3,000 on the Dow wouldn't surprise me. Short term, I think that 5,200 is almost certain. I'm planning accordingly and will readjust if and when the Dow breaks 5,xxx.

Will there be some meteoric, rip-your-face-off bear market rallies? Most definitely.

In August of 1999 the gold to Dow ratio was 44, in other words it took 44 ounces of gold to buy the Dow index. In January of 2000 it had dropped to 41. In October of 2007, the gold/Dow ratio was 19. In October of this year the average ratio was 12. Currently, 10 ounces of gold buys the Dow. If and when the ratio drops to 5...

Lehman Brothers Version 2.0

I woke up at 3:30 this morning to this frightening thought: They're ALL too big to fail.

Last week GM, Ford and Chrysler begged Congress for a $25 billion loan from taxpayers. All three auto makers are on the verge of bankruptcy and this loan would supposedly help give them some time to turn things around (no one believes that $25 billion is enough, or that they can turns things around anyway).

Something else happened last week. The financial sector (banks and insurance companies) got decimated. Last week alone: Bank of America (down 30% on the week), Citigroup (down 60% on the week), JPMorgan (down 34% on the week), Wells Fargo (down 25% on the week).

Coincidence? I think not. Congress was not impressed with the performance of the big 3 CEO's. Neither was the market. The market is jittery. Lehman Brothers is still fresh on everyones mind. No one wants another Lehman Brothers style bankruptcy, the problem is a General Motors bankruptcy would be orders of magnitude worse.

The notional value of credit default swaps written against a GM bankruptcy is 9 times that for Lehman Brothers. A GM bankruptcy would be 9 times as bad as Lehman's FAIL.

The bottom line: There is no chance in hell that GM will be allowed to file for chapter 11.

The problem: There are countless companies like GM that are now on the verge of bankruptcy or will be in the near future. Rest assured, the players (banks, hedge funds, insurance companies, etc.) in the totally unregulated credit default swap market and other over the counter derivatives market have placed bets on that debt too. However, they wouldn't be able to post collateral in the event of a "too big to fail" failure, and what are the chances that JPMorgan's real world insolvency is allowed to see the light of day? Zero.

So, EVERY ONE OF THEM is too big to fail.

End result: The bailouts will not stop anytime soon. They cannot. We are about to embark on another wave of wild money expansion. Hopefully China et al. will continue to buy our Treasuries.

And hopefully someone has a plan for the hyperinflation that is coming down the track.

We've fucked it up. We've fucked it all up.

Vice President Palin

I'm glad the Presidential race is over, but I'm sad that Saturday Night Live has returned to its pre-Tina-Fey-as-Sarah-Palin mediocrity. Thankfully, the real Sarah Palin continues to provide belly aching laughter.

Question: What would make her awkward, painfully dim witted answers to elementary questions more hilarious (in an oh-my-god-she-was-a-vice-presidential-nominee kind of way?)

Answer: A backdrop of turkeys being slaughtered.

How will the gods of laughter top this one? No one knows the answer to that question, but we should thank them for this gem:




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On a sad note, three more banks boarded the failboat, exciting and new... come aboard, we're expecting you....

PFF Bank and Trust, Downey Savings & Loan, and The Community Bank were siezed by federal regulators.

It's The Rumormongers

"Rumor mongering is at the heart of our problems." Vick "The Bandit" Pandit.

Nope, it's you and it's time to say goodbye.

Goodbye, sad Pandit.

Here's Your Handout

The CEOs of Chrysler, Ford and General Motors spent a second day in Washington asking for handouts, you know, because they're on the verge of bankruptcy because they don't know how to run profitable car companies. The (not so) funny thing is, they flew to Washington on private corporate jets. The Gulfstream G4 that Rick Wagoner rode in on set General Motors back about $45 million. It's estimated that the flights alone cost about $80,000 each, in fuel and maintenance. And they have the nerve to ask for taxpayer money.

Here's your handout.



I will never, ever buy a car manufactured by GM, Ford or Chrysler as long as I live. In fact, I will never buy a car from a company that employs any worker that is a member of the UAW.

Catastrophic Failure

In his bid to scoop up more of the taxpayer money being handed out at the Treasury Department, GM CEO Rick Wagoner said that the earth would stop rotating on its axis if General Motors was allowed to board the failboat.

"Such a level of economic devastation would far exceed the government support that our industry needs," he said. "This is about much more than just Detroit. It's about saving the U.S. economy from a catastrophic collapse."

Actually Rick, this is much more about you failing as CEO of General Motors. Slow, slow golf clap.

GM will get the money it is begging for, it will then burn through that money like only a failing behemoth can, at which time it will return to the begging bowl for more. Then it will sink the failboat.

"Is $25 billion enough?" Senator Richard Shelby said today during Congressional testimony. "Is this the end or just the beginning?" He later told the CEOs of Ford, Chrysler, and GM, "A lot of people think you already failed, that your model has failed."

Geez, ya think?

And Rick Wagoner has the nuts to toss the fail ball into the taxpayers court...

"We want to continue the vital role we’ve played for America for the past 100 years… but we can’t do it alone. You can help us through this crisis. In return, we will repay the taxpayer’s faith and support many times over, for many years to come."

Hey Rick, go to hell, and take your entitlement with you.

A Tale Of Two Jerrys

I'm all in (or out).

The Jerry Yang on the left: winner of the 2007 World Series of Poker Main Event. The former social worker turned a $225 entry fee into an $8.2 million grand prize and pledged 10% of his winnings to charity.

The Jerry Yang on the right: co-founder and (former) CEO of Yahoo! This Jerry Yang shoved all in with 7, 2 offsuit and got called by Microsoft's Steve Ballmer who was holding aces.

A few months ago Microsoft was interested in buying Yahoo! for a share price in the low $30's. Jerry Yang nuked that negotiation like the donkey that he is. Yahoo! shares closed today at $10.63. This evening, Yang announced his resignation and will now crawl under the rock from which he came. If you open a window, you can hear Steve Ballmer laughing.

Do you Yahoo!?

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Japan, the world's second largest economy is officially in a recession, which really isn't news at all.

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Citigroup announced that it will cut 52,000 jobs. Not to be outdone, JPMorgan announced that it too will send out pink slips.

All Hail The G-20

From the official statement of the G-20 meeting this weekend:

1. We, the Leaders of the Group of Twenty, held an initial meeting in Washington on November 15, 2008, amid serious challenges to the world economy and financial markets. We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems.

2. Over the past months our countries have taken urgent and exceptional measures to support the global economy and stabilize financial markets. These efforts must continue. At the same time, we must lay the foundation for reform to help to ensure that a global crisis, such as this one, does not happen again. Our work will be guided by a shared belief that market principles, open trade and investment regimes, and effectively regulated financial markets foster the dynamism, innovation, and entrepreneurship that are essential for economic growth, employment, and poverty reduction.

Root Causes of the Current Crisis

3. During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.


You can read the rest of the useless statement here...

The Fact Mirage

A collection of quotes from Treasury Secretary Hank Paulson:

April 20 2007 — "I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained."


March 16, 2008 — "I have great, great confidence in our capital markets and in our financial institutions. Our financial institutions, banks and investment banks, are strong. Our capital markets are resilient. They're efficient. They're flexible."


May 16, 2008 — "Looking forward, I expect that financial markets will be driven less by the recent turmoil and more by broader economic conditions and, specifically, by the recovery of the housing sector."


November 12, 2008 — "This market has for all practical purposes ground to a halt. Today, the illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards. This is creating a heavy burden on the American people and reducing the number of jobs in our economy."



Assorted related quotes:

"If it turns out that [the banks] are hoarding, you’ll have a revolution on your hands. People will be so livid and furious that their tax money is going to line their pockets instead of doing the right thing. There will be hell to pay." - Senator Chris Dodd (D) Connecticut

"Is Kashkari A Chump?"

Good question from Congressman Elijah Cummings of Maryland. The question was directed right at Neel Kashkari today during his testimony to Congress. It sort of reminded me of Dirty Harry's "Well, do ya, punk?"

Neel Kashkari, appointed by Hank Paulson, oversees the Treasury's $700 billion failout plan. Or, what used to be the plan. Or the new plan. Or whatever it is. When asked why he scrapped the Troubled Asset part of Troubled Asset Relief Program, Kashkari answered, "I don't think it's a good use of taxpayer money to put taxpayer capital into a financial institution that is going to fail."

Good answer from Kashkari (especially since it includes my new favorite word), er, it would have been good answer if it didn't make a complete mockery of the TARP. It would have been a good answer if wasn't like pouring salt in the wound caused by lying and force feeding the bill to Congress and the American taxpayers. It would have been a good answer if it wasn't further evidence that Team Paulson/Bernanke have no idea what they're doing. It would have been a good answer if..., well, it was bad answer.

Chump? Yes. FAIL? Absolutely.

FAIL

Confidence?

The TARP (Troubled Asset Relief Program) was sold by Hank Paulson and others as a way to allow banks to remove illiquid toxic assets (the TA part of TARP) from their balance sheets. Paulson, Bernanke and others railroaded the bill through Congress saying in so many words that if it wasn't passed immediately the worldwide financial system would suffer a catastrophic meltdown.

Today, Paulson held a press conference and stated, "It was clear to me by the time that the bill was signed on October 3 that we needed to act quickly and forcibly, and that purchasing troubled assets, our initial focus, would take time to implement and would not be sufficient given the severity of the problem."

Are. You. Fucking. Kidding. Me?

So the bill you lobbied for, no, begged for (literally, Paulson got down on one knee in front of Speaker Pelosi and begged) was a crock of shit from the get-go? You knew that the bill would not work before the ink had dried? "By the time the bill was signed".

I feel like I'm taking crazy pills.

My confidence in those in charge? Mark it ZERO.

The market didn't appear to like it much either. Down another 5%.

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Declining asset values, ballooning debt, inflationary expansion of the money supply, rising unemployment, peak oil, stagnant wages, debased currencies... Welcome to the popping of the standard of living bubble.

Feels Like Spinning Plates

The Bernanke/Paulson side show.

Hey, No Peeking!

Today, Bloomberg reports:

The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

"The collateral is not being adequately disclosed, and that's a big problem," said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. "In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin."

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

So they promised transparency, then said “Hey, juz kidding!”

Not that we need to see a list of the collateral that they’re accepting (chicken bones, paper bags filled with dog poo, lawn clippings, bad disco on 8-track cartridges, etc.) because everyone knows the collateral is worthless. The lack of transparency just confirms it.

In addition to reneging on transparency promises, the Fed/Treasury tag team has given itself the power to author tax law, in order to make handouts/bailouts/FAILouts less “difficult”. Say goodbye, section 382.

“Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no,” said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. “They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks.”

So, they’re breaking the law. Will anyone do anything about it?

“It’s just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system,” said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. “We’re left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?”

Answer: No one.

At what point do we say enough is enough?

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Today, American Express announced that it received approval from the Federal Reserve in its application to become a bank holding company (Morgan Stanley and Goldman Sachs transformed themselves from investment banks into bank holding companies back in late September). Apparently people aren’t paying their credit card bills, which is shocking because I thought consumers were flush with cash.

Why does American Express want to change its stripes from industrial loan company to bank holding company? The TARP, of course! Bank holding companies have access to the unlimited supply of taxpayer monopoly money that Hamerin’ Hank Paulson and Helicopter Ben Bernanke are doling out. Duh!

Normally there’s a 30 day waiting period for this type of application but “in light of the unusual and exigent circumstances affecting the financial markets” the Fed sorta rushed this one through.

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Circuit City filed for bankruptcy. Mattel, maker of toy cars now has a larger market cap than General Motors, maker of real cars. Shares of GM were down 23% to $3.36, levels not seen since the 1940's.

Stranger Than Fiction

From the What-The-Fuck? department:

It turns out the co-founder and chairman of recently FAIL'd Franklin Bank, Lewis Ranieri, is the inventor of one of the key ingredients of EPIC ALPHABET FAIL SOUP - the mortgage backed security. Twenty years ago Ranieri began repackaging home loans as bonds and began selling them to investors.

In 2004, BusinessWeek ran:

"As part of its anniversary celebration, BusinessWeek is presenting a series of weekly profiles of the greatest innovators of the past 75 years. Some made their mark in science or technology; others in management, finance, marketing, or government."

BusinessWeek went on to profile Ranieri:

"The past quarter-century has seen a revolution in finance. It's felt every time a homeowner refinances a mortgage or signs up for a credit card. No one person can claim to have lit the fuse for this revolution -- but Lewis S. Ranieri was holding the match. Joining Salomon Brothers' new mortgage-trading desk in the late 1970s, the college dropout became the father of "securitization," a word he coined for converting home loans into bonds that could be sold anywhere in the world. What Ranieri calls "the alchemy" lifted financial constraints on the American dream..."

It seems, however, that Dr. Frankenstein has been eaten by his creation. The irony is delicious. The FDIC is reporting that the deposits of Franklin Bank will be assumed by Prosperity Bank. Did you get that? Prosperity Bank.

But wait, it gets better.

In 1997, Fischer Black and Myron Scholes won the Nobel Prize in Economics for their work on equity options pricing, "a new method to determine the value of derivatives" - the Black-Scholes Model.

A few years earlier, Myron Scholes and several other colleagues from Salomon Brothers founded a hedge fund called Long-Term Capital Management. Starting with $1 billion in investor capital, LTCM was hugely successful (and hugely leveraged) in the first few years with annualized returns of over 40%. The success ended quickly when in 1998 the East Asian/Russian financial crisis caused Long-Term Capital Management to blow up like a propane bomb, losing $4.6 billion in less than four months. LTCM became the poster child for investment risk potential.

Myron Scholes was implicated in the case of LTCM v. United States for using an illegal tax shelter in order to avoid paying taxes on profits. Under oath, Scholes stated that he was not an expert on tax law. The prosecution introduced a textbook titled "Taxes & Business Strategy" written by Scholes, which contained a chapter on step transactions - one of the very concepts that was used to prove the illegal tax shelter.

So, anyhoo.

In 1999, Scholes and several colleagues from LTCM founded another hedge fund called Platinum Grove Asset Management (because hey, the second times a charm), which as of the end of August of this year had almost $5 billion under management. Yesterday, Bloomberg reported that Platinum Grove has suspended investor withdrawals after suffering a 38% loss through the first half of October.

Go to FAIL, do not pass go, do not collect $200.

How To Grow A Rabbit Hole

And the attraction of zero-bound Alice.

The fight to stabilize the financial system (through liquidity injections by the Federal Reserve, Treasury efforts to recapitalize the banks, and increased FDIC deposit guarantees to prevent bank runs) has had some unintended consequences. In a financial panic, the surge in the demand for money can result in a spending collapse. The rush for cash is on. In a rush for cash, consumers hoard money as best they can and stop spending. This, of course, has a negative effect on businesses. Businesses attempt to hoard cash too, by cutting expenses. Employees are the single biggest expense, so jobs are cut. An unemployed consumer cuts expenses to a bare minimum. This negative loop feeds on itself.

So, one of the symptoms of a surge in the demand for money (shown as a cutback in spending) is price deflation.

Fortunately, Ben Bernanke understands this. In October, in his speeches to both the Economic Club of New York and the House Budget Committee, he articulated the two keys goals of central bankers and policy makers in this crisis; 1. Regain control over the supply of money, and 2. Avoid deflation.

With regards to the supply of money, Bernanke's task is to overcome a circumstance in which the deleveraging banking system is pushing down the money multiplier at an even faster rate than the Fed is boosting the monetary base. The banks are a black hole. Thank you very much to the $500 trillion derivatives market...

With regards to deflation, it is already beginning to happen. Spending is collapsing. People that need credit cannot get it. People that do not need credit are pulling back in their consumption in order to boost their money balance. In this environment, virtually all asset prices have collapsed. Equities, commodities, real estate, art... all down.

In an attempt to stave off deflation the Federal Reserve has reduced its Fed Funds Rate from 5.25% in August 2007 to 1% now. With the Fed expected to cut another 50 basis points in December and unemployment on the rise, the danger of a zero bound liquidity trap are significantly hightened. If the deflationary spiral picks up speed, central banks will be forced to move from focusing on monetary policy to fiscal policy. We're already seeing that to some degree. The first and soon to be second stimulus packages are helicopter drops. The problem is, the first stimulus was spent. For the most part, the second will be saved.

Brother Can You Spare A Job

You know times are tough when you're utilizing the payday loan shark (I mean shop) next to your neighborhood liquor store. You know times are really, really tough when the payday loan shops go out of business due to a lack of paydays.

Unemployment numbers were released today and they showed that the U.S. economy shed 240,000 jobs (soon to be revised to 400,000 I'm sure) in the month of October. In addition, September's total of 159,000 jobs lost was revised to 284,000 and August was revised from 73,000 to 127,000. The U.S. economy has now lost 1.2 million jobs since the beginning of the year, and it's accelerating. Unemployment now stands at 6.5%, the highest level since 1994.

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General Motors and Ford reported earnings (err, losses) today. Ford reported a Q3 operating loss of $2.98 billion and burned through $7.7 billion in cash reserves. Not to be outdone, GM reported an operating loss $4.2 billion and burned through $6.9 billion for the quarter.

When asked about the possibility of bankruptcy, GM CEO Rick Wagoner said, "We have no plans whatsoever to consider anything other than continue to run the business."

Oh, really? "Run the business"? That, and seek a lifeline from Washington. He forgot to mention that. Without a bailout, General Motors will be bankrupt before the end of 2009.

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Two more banks went tits up today, bringing the total to 19. Regulators siezed Franklin Bank of Houston and Security Pacific Bank of California, with a combined total $5.7 billion in assets.

Welcome aboard the FAILboat.

Roger and Me

"General Motors didn't evict them. Talk to the landlord."

- then GM CEO Roger Smith on former GM workers being evicted from their homes after 1988 plant closures in Flint, Michigan.

General Motors is bargaining, begging and pleading for a handout and is threatening to launch the Queen Mary of all failboats.

They say they need $50 billion, so I asume they need at least double that. How much they'll need the following day, week or month is anybodys guess. I suppose you could ask CEO Rick Wagoner but he wouldn't be able to tell you anything, other than how to steer the Titanic straight into an iceberg.

This is the same Rick Wagoner that in 2005 made a huge bet on big trucks (or a big bet on huge trucks). FAIL. GM has been restructuring tens of billions of dollars in losses for years now and has been shutting plants left and right. If the guy had half a fucking brain in his head he would have made the move to more fuel efficient cars, not Hummers.

I wanted to get a feel for the current company vision so I visited GM's website. First gm.com, then the Corporate Information tab (click). The first thing I saw was some hydrogen fuel cell shitshow, then an annoying popup asked "Would you be willing to participate in a 8-10 minute survey about GM?"

Really, an 8-10 minute survey? No thank you. I'd rather read more about your retarded hydrogen fuel cell car that will never see the light of day because plug in electric and electric hybrid cars make more sense in every. single. way.

What kind of company asks you to take a survey the second you visit their website? I clicked one page off of the home page and already you're asking me to spend 8-10 minutes of my time so you can collect information? Imagine walking into a store to buy some shoes and the instant you walk in the door, whoosh, some kid is in your face asking you to rate your shopping experience (the one you haven't had yet). What kind of a company does this? General Motors.

Lucky for them I was on a fact finding mission, and was curious to see what kinds of questions they would ask in their survey, so I clicked "Yes". Another window popped up that said:

"Thank you very much for your participation interest. But unfortunately we already have enough participants for this survey. Therefore we have closed the questionnaire. However we would be very glad if you could participate in our studies in the future!"

That was all I needed to see. And that's how I know that GM is the worst auto maker on the planet.

Welcome aboard the too-big-to-fail boat. The begging bowl of taxpayer loan money is over there. Make sure you lap it up.

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The Bank of England proved that it was late to the rate cutting party and cut a panicky 150 basis points. The European Central Bank cut 50 basis points.

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The market had it's worst two day stretch since 1987 ahead of what is expected to be the worst unemployment report in decades. Estimates are for a loss of 200,000 jobs in October.

Obama Said Knock You Out

Barack Obama has the opportunity of a lifetime.

It would be difficult to dream up a more daunting set of circumstances for a young Presidents first year in office - two failing wars, potential double digit unemployment, a sputtering economy in the middle of a severe recession, a record defecit, the worst financial crisis in seventy years, an energy crisis that is coming to a head and a nuclear Pakistan that is coming unglued.

Welcome to the Whitehouse.

I didn't vote for Obama because I agree with all of his views, or even a majority of them, because I don't. I voted for Obama because he's inspiring. I voted for Obama because I believe he has the ability to right many of the wrongs of the Bush fiasco. I voted for Obama because he will restore some of our standing in the world, the standing that Bush sqaundered with his arrogant hubris. I voted for Obama because he listens, he cares, he has vision. I can see all of those qualities in him. Or maybe I can feel them. In watching him speak, be it to 200,000 or a one-on-one interview, I don't ever remember feeling like he was insincere. He's a politician, sure, so some of what I've heard him say I've taken with a grain of salt, but I truly believe that he wants to change the world. And you have to get elected before you can accomplish anything.

So Barack Obama made history last night and took the first step. He did it by winning the trust and votes of over 63 million Americans. Last nights election restored some of my faith in this country. And that's good enough for now.

You've got 72 days to finalize your planning. Please don't fuck it up.

Eddie Murphy Voted For Change

No Delusions

Normally, I'd want to vote Republican tomorrow. Not because I always vote Republican, I don't. However, I’d like to vote for some form of gridlock, because a Democratic domination of both the Executive and Legislative branches, frankly, scares me. For me it has nothing to do with which party is in control, because in general they both stink. It has everything to do with a single party having too much control. And that is exactly what the majority of Americans are going to vote for tomorrow. But, so be it.

I used to like McCain. I liked him because he was a… wait for it… wait for it… a maverick. He actually was. He used to be one of the most bi-partisan politicians in Washington. But when you have redeeming qualities, you don’t need to keep telling people about them in short sound bites. So why has he felt it necessary to say the word maverick at every opportunity? The word “maverick” has been so overused, so bastardized by the McCain campaign that it makes me sick when I hear it. Top Gun will never be the same.

But McCain didn’t lose this election by regurgitating meaningless "drill, baby, drill" slogans and phrases till he was blue in the face my friends, although they didn’t help, he lost it when he chose Sarah Palin as his VP running mate. That, and the disasterous Bush administration sealed the deal, but I digress. If anyone had any doubts about McCain’s decision making abilities, those doubts were absolutely realized with that horrendous pick. I have a feeling that he lost most undecided voters with the Palin debacle.

The differences between the Republican and Democratic candidates are usually nuanced, as they are for the most part with McCain and Obama. Their stances on issues like energy, health care and taxes are not polar opposites although they do differ in a few key areas. Obama’s plan to raise taxes on individuals earning more than $250,000 should be ditched immediately. You do not raise anyone’s taxes during a recession. In my opinion Obama’s energy plan is most worrisome. His lack of interest in nuclear power is ignorant. His carbon tax on coal is foolish. The energy crisis in this country will go from mildly problematic to exceedingly painful in the next ten years. An energy policy that does not include all sources including nuclear and coal, in fact especially nuclear and coal, is incredibly dangerous.

But Obama has one thing that John McCain does not have; the ability to actually lead. And after a disastrous eight years of George Bush (I voted for him one of the two times and have punched myself in the face repeatedly for it) we need a President that can lead. We need a President that can inspire people. We need a President that instills hope. Barack Obama will be that President. John McCain will not. When Obama speaks I’m interested in what he has to say. When McCain speaks it’s awkward and I’m embarrassed for him. I’m tired of being embarrassed every time the President opens his mouth. Is a shred of respect and confidence too much to ask for in a President?

So I’m voting for Obama, but I have no delusions. Water will not be turned into wine. However, things will start to change for the better. We will start to pick up the pieces of this 8 year trainwreck and get back on track. I disagree with several of Obama's stances, but he's young and open minded. He'll surround himself with good people, and under positive influences, open bright minds can change. And change is what we need right now. Long time coming.

Plus, he looks pretty cool smoking a cigarrette.