Sunday, October 5, 2008

Bailout money going fast

The new definition of fast money. Two weeks ago, the federal government bequeathed $85 billion dollars to American International Group to tide them over. AIG has spent $61 billion already. As of Friday.

MIDLAND, Texas (Reuters) - President George W. Bush said on Saturday that benefits from the recently passed financial bailout would take time to show up in the U.S. economy.

In 2003, Americans owed about $593 billion in home equity loans. Today, the tally is in the neighborhood of $1.1 trillion. That amount does not include mortgages.

Most frightening observation uttered on Wall Street this week: “We’re dealing with the next situation.” Meaning: there’s more to come. The stock market did not rebound despite getting the $700 billion ransom when they held a gun to Congress’s head.

Students starting college this year likely have never dialed a telephone.

There IS hope. Boutique movie theaters have opened in Minnneapolis complete with full service bars. The sommelier recommends a fruit-forward Chilean cabernet to accompany your Raisinettes.


Ken Martin said...

One of those upscale theaters is going to be in the new phase of The Domain, Austin's shopping district for the big spenders. Tickets will be $35 but you have a limited number of seats and those seats will be more like Barcaloungers than the kind of theater seats you get at the local multiplex. And you'll be able to get restaurant meals that are likely to be more ritzy and pricey than the chow served at our funky Alamo Drafthouse Cinemas.

The South Plainsman said...

This "bailout" is only the beginning. Wait until the "credit default swaps" start unwinding. Or until the Europeans start guaranteeing all of their deposits, drawing huge amounts of cash out of US banks (Ireland has already done this.) There are over $54 Trillion in CDS, if you want a number. This thing has a long way to go.

Anonymous said...

I would have thought they would have the Palin (Pay-leen) Chilean wine on is hard to swallow but it tastes and looks good.
You know "It is only money " came to me the other day. Guy called from a radio station, a friend, on a talk show and said I was the person he knew who had lived through the entire Depression. True I was three when it started but I quick for my mother lost all her inheritance and you can imagine that the word bitching about it was heard frequently.
Anyhow I told him that there was the WPA, etc, etc...people begging back door for food...and that 1936 was the we had that damned drought. But it occurred to me that this 700 billion is a lot of money but it is only money and if it really can right this sinking Titanic the I would rather lose the money than have that depression picture again. It was terrible. Hell I couldn;t always have a dime to go see my favorite Cowboy...Buck Jones at the movies. Bill

Ira Kennedy said...

Several years back I asked my Grandma Rosa, a life-long migrant worker, about The Depression. Her response was, "What depression?"

I reckon when you don't have anything to lose, you have everything to gain.

Anonymous said...


These are uncertain and confusing times for our nation, in which we may well ask if any sector of the economy is trouble free. After spending four weeks ignoring the issue, followed by a day and a half skimming the past month's newspaper accounts, I have come up with some recommendations. Here are the
Mary Lenz suggestions for safe investments .

THE MAFIA: When it comes to business organizations with a long track record as well as dedication to solid return on investment year after year, in good times and bad, you can absolutely depend on the Mafia. The Mafia has decades of financial experience and is virtually recession proof. If you are philosophically opposed to government regulation, remember, the Mafia has operated beyond regulation for years. Its legions of highly trained associates have no problem obtaining capital whenever reserves run short.

THE VATICAN: One of the first truly global enterprises, the Vatican provides products and services that vast numbers of people believe they simply cannot do without, especially in troubled times. Despite that unfortunate episode
in the Middle Ages when the Vatican lost support of German investors over the securitization of bundled indulgences, the Vatican has generally stood the test of time. As the threat of inflation looms, the Vatican sits tight on such inflation proof assets as paintings, statuary, architectural
treasures and land.

THE SOMALI PIRATES: Low overhead and high profits are the watchword of the Somali pirates. Venture capitalists of the first order, the Somali pirates this year have hijacked 25 ships, reaping ransoms of up to $2 million each, while conducting their business in what appears to be leaky motorboats.
These high risk, high growth upstarts are definitely a group to keep an eye on.

NUCLEAR DERIVATIVES: If you are unwilling to do business yourself with some scary looking dudes, you can invest in complex financial papers backing the shadowy figures who do the deals. The returns on your investment in derivatives based on black market sales of nuclear warheads, plutonium,
WMDs, etc. can be stunning. Again virtually recession proof, nukes are something governments and bad guys feel they simply cannot do without.

COCAINE: Competition in this economic sector is fierce, not to mention murderously insane. Nevertheless, while not exactly bullet proof, the profits can be tremendous. Collateralized Drug Obligations (or CDOs) involve
pools of loans to smuggling networks, providing insurance to the cartels in the event that users cannot pay for their nose candy or the street dealers themselves are beheaded with chain saws.

THE U.S. CONGRESS: Prices vary, and, with radio talk show hosts out of control, reliability is sometimes uncertain. But if you want to be major economic player, there is no better investment that your own personal congressman. With a congressman, as with a vacation condo, time share programs with other investors can be arranged.

HEDGE HOGS: These shy, yet beneficial, sweet natured creatures eat insects, provide for healthy foliage and are a lot easier to understand than hedge funds. What your congressman may lack in spine, a hedge hog has more than plenty to spare. Hedgehog default swaps with weasels, chipmunks and raccoons
are available.

CHINESE ACROBATS: If you are having trouble balancing your portfolio, try using Chinese Acrobats.

DINNER: Whether you want to invest in your own small dinner -- or a larger dinner with your friends -- or even larger dinners provided by The Salvation Army, the American Red Cross, Texas Baptist Men, Buddhist Compassion Relief, your local food pantry and other voluntary organizations providing meals for hurricane victims and the homeless, dinner is a solid investment for which there is no substitution.

The other benefit to DINNER is that it is not all that difficult to
understand. And, remember, when you invest in baloney sandwiches at a
downtown shelter, you can be sure you are providing genuine baloney -- rather than the kind the Wall Street has been peddling recently.

Mary Lenz

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